Citizens' Bond Sale Boosts Its Reserves

Published: Jun 28, 2006

NEW YORK - The state-run Citizens Property Insurance completed a $3.05 billion bond sale Tuesday, increasing company reserves for damage claim payment if a storm strikes, a company official said. The sale boosted Citizens' reserves for paying claims to nearly $5 billion.

Terri Slack, chief financial officer for the nonprofit company, said the bond revenue will be used to pay future claims after the company's available resources have been utilized.

The rate will vary from 5.25 percent to 5.5 percent annually, based on the London Interbank Offering Rate, which sets the rate for bonds daily, Citizens' spokesman Rocky Scott said. Citizens will pay about $130 million annually in interest.

The Associated Press