FHCF Issues Year-End Fund Balance and Borrowing Capacity Estimate
Oct 23, 2008
The Florida State Board of Administration of Florida (“Board”) has issued an estimate of the Florida Hurricane Catastrophe Fund (“FHCF”) borrowing capacity and the FHCF projected balance as of December 31, 2008, which is estimated to be $2.786 billion. This represents the amount of claims-paying assets available, not including any bonding proceeds, resulting from Covered Events that may occur during the June 1, 2008 through May 30, 2009 FHCF Contract Year.
Given the current state of financial markets, the FHCF borrowing capacity is estimated to range between $1.5 billion and $3.0 billion.
The estimated borrowing capacity and estimated available year-end cash balance, together with other liquidity resources, provides the FHCF with a total estimated loss reimbursement capacity of between $11.786 billion and $13.286 billion over the next six to 12 months. The Board obligation for payment of reimbursable losses is limited, and by law shall not exceed the actual FHCF claims-paying capacity.
The Board states that its good faith estimate is being made while highly volatile global financial market conditions exist; therefore, changing market conditions can dramatically impact the FHCF’s actual loss reimbursement capacity either positively or negatively. Current conditions may or may not be the same if and when the Board determines that it is necessary to seek the issuance of revenue bonds.
Should you have any questions or comments, please do not hesitate to contact Colodny Fass.
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