Citizens Property Insurance Corp. sold $250 million in three-year catastrophe (CAT) bonds, which transfer to private investors a portion of the state-backed insurer’s storm-related financial risk, the company announced Friday.
The second issuance of its kind, Citizens finalized the sale Thursday, following up the success of last year’s $750 million, two-year placement, the company said. Both were completed through Everglades Re Ltd.
“This action continues Citizens’ goal of transferring risk to the private sector by working closely with nontraditional capital markets and further protecting our policyholders and all taxpayers in Florida,” said Citizens Chairman Carlos Lacasa.
“Citizens has emerged as an international leader in risk transference and our achievements are being recognized by financial markets around the world,” Lacasa said.
Sold at a cost to Citizens of 11.08 percent, the most recent bonds went to market at a 40-percent reduction from the 19.07 percent rate offered last year, for a savings that will total nearly $60 million over the life of the program, according to the company.
Citizens is the nation’s ninth-largest home insurer and the largest in Florida with 1.3 million policies statewide, 191,092 in Broward County and 133,589 in Palm Beach County.
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