Citizens Property Insurance Inc. successfully completed a $3.05 billion bond sale Tuesday, boosting company reserves for damage claim payment if a storm strikes, a company official said.
“We had a very successful pricing today,” said Terri Slack, CFO of the not-for-profit company. “We priced at a lower interest rate than anticipated.”
Lower interest rates mean Citizens will pay less money to service the debt over a 20-year span, Slack said.
The sale boosted Citizens’ reserves for paying claims to nearly $5 billion.
Slack said the bond revenue will be used to pay future claims “after Citizens’ available resources have been utilized.”
The sale boosted Citizens’ reserves for paying claims to nearly $5 billion.
Citizens and its financial advisor, Raymond James, began working on the bond sale earlier this year as a means to build reserves to pay for damage claims from future hurricanes.
Bear Stearns, Citigroup, Merrill Lynch and UBS were the senior managers of the sale.
Source: Citizens Property Insurance Inc.
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