Citizens Board of Governors Meeting Report: March 25

On Tuesday, March 25, 2008, Citizens Property Insurance Corporation held a special Board of Governors (“Board”) meeting to approve documents for the proposed issuance of up to $2 billion of HRA Series 2008A bonds.

The meeting was called to order by Chairman Bruce Douglas, with Board Members Andy Bennett, Richard DeChene, Carol Everhart, Gloria Fletcher, Earl Horton, Allan Katz and Jay Odom present. Also in attendance were Sharon Binnun, Citizens’ Chief Financial Officer (“CFO”); John Forney, Citizens’ Financial Advisor, and representatives from Citizens’ general and special counsel.

The Board voted unanimously to approve the High-Risk Account Senior Secured Bonds, Series 2008A (“HRA 2008A Bonds”), an overview of which can be viewed by clicking here.

The HRA 2008A Bonds are being issued as part of the previously-approved liquidity financing restructuring program in preparation for the 2008 hurricane season. The HRA 2008A Bonds, which will not exceed $ 2 billion, will have fixed interest rates and will be short-term (up to five years). This short-term, fixed-rate financing is a departure from Citizens’ prior liquidity programs, which have historically used variable-rate, capital-market programs.

Due to recent market upheaval, Citizens has chosen a fixed-rate vehicle in order to maintain sufficient liquidity. As currently planned, these would be the first tax-exempt bonds issued by Citizens for pre-event purposes.

Various aspects of the financing structure and terms are still in development and will be voted on by the Board at a later date. These aspects include Bond co-managers (the Board previously approved appointment of CitiGroup, Goldman Sachs, Morgan Stanley and UBS as senior managers), payment amounts among the senior and co-managers, and the costs of bond issuance.

Included in the HRA 2008A Bond Resolution was authorization for the Chairman to approve the details of the Bonds; confirmation of Regions Bank as successor Indenture Trustee, Paying Agent and Registrar; and authorization of the negotiated sale of bonds to an underwriting syndicate. The HRA 2008A Bond Resolution can be viewed by clicking here. To view a summary, click here.

Following approval of the HRA 2008A Bond consent agenda, the meeting was adjourned.

Should you have any questions or comments, please do not hesitate to contact this office.

 

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