BondBuyer – Florida preps $2.25 billion deal to pay hurricane insurance claims

Author: , Post Date: August 31, 2020
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Excerpt below.

By Shelly Sigo – The Bond Buyer
August 31, 2020

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Florida plans to “opportunistically” take advantage of historically low taxable municipal bond rates in a $2.25 billion deal that a state official said should be attractive for yield-starved investors.

Proceeds will provide capital to pay claims, if needed, by the Florida Hurricane Catastrophe Fund, a state-run, tax-exempt trust fund that provides lower cost reinsurance to the private property insurance market, and the state-owned Citizens Property Insurance Corp., an insurer of last resort for homeowners.

The bonds are rated AA by Fitch Ratings and S&P Global Ratings, and Aa3 by Moody’s Investors Service. All assign stable outlooks.

Sarasota, Florida-headquartered Cumberland Advisors, an investment advisory firm with over $3 billion in assets, has purchased the corporation’s bonds in the past, said Patricia Healy, senior vice president of research and portfolio manager.

Cumberland may be interested in buying some of the bonds being sold this week, she said.

“It would depend on final pricing because it always comes down to that and where it falls out relative to other structures,” Healy said. “We’re fine with the credit [but] it could come rich.”

Healy also said “it’s kind of funny” that the bonds are being issued during hurricane season, which runs from June 1 through Nov. 30.

Read the full article with subscription (paywall) at The Bond Buyer website.


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