Florida’s Citizens Property Insurance Finance and Investment Committee To Contemplate Sale of Legacy Assets

Jul 12, 2013


A meeting of Florida’s Citizens Property Insurance Corporation’s (“Citizens'”) Finance and Investment Committee (“Committee”) is scheduled for Monday, July 15, 2013 at 11:00 a.m. to analyze an investment recommendation on Citizens’ “Legacy Assets.”

The Legacy Assets are investments purchased on Citizens behalf that defaulted on their original obligation in 2007, just prior to the start of the recent financial crisis.

Citizens currently holds six securities that make up the Legacy Assets, including:

  • State Board of Administration Fund B
  • Lehman Brothers Holdings Escrow
  • AFF Financing
  • Atlantic East
  • Pacific West

Prior to their default, the original principal amount of these combined holdings was $968.5 million.  Because the assets were determined to be distressed, ensuing writedowns occurred during 2007 and 2008.  All of the Legacy Assets, with the exception of Lehman Brothers, were restructured by October 2008 and resumed repayment of both principal and interest on a monthly basis. 

Since the Legacy Assets have been performing, but not liquid, Citizens has continued to hold them, resulting in the recovery of almost $134 million through increasingly favorable market conditions.

At Monday’s meeting, the Committee will consider a recommendation to monitor these assets and possibly effect their strategic sale over the next 24 months, but only if certain values can be realized that would afford a combined 90 percent return of the original principal.

To view the meeting materials, click here.


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