State Board of Administration Meets On Cat Fund Liquidity Financing Expansion Tuesday, July 17

The State Board of Administration (“SBA”), composed of Governor Charlie as Chairman, Chief Financial Officer Sink as Treasurer and Attorney General McCullum as Secretary will convene during a meeting of the Florida Cabinet on July 17, 2007 at 9 a.m. 

The meeting agenda and analysis document are attached for your review. 

According to the attached analysis, The Florida Hurricane Catastrophe Fund (“FHCF”) has potential reimbursement obligations for the 2007 hurricane season of up to $27.85 billion. Currently available cash resources of the
FHCF are approximately $3.8 billion. In accordance with its statutory construct, the difference would be made up after an event from the proceeds of revenue bonds issued for such purpose and secured by emergency assessments levied on most property and casualty insurance
premiums in the State of Florida. However, the statute also explicitly provides the ability for the FHCF to secure “pre-event” financing in the absence of a hurricane. The purpose of this report is to analyze the FHCF’s current liquidity situation in light of the magnitude and timing of its
potential obligations, and to recommend the most efficient and effective alternative for consideration that would expand the FHCF’s liquidity program.

The Florida Hurricane Catastrophe Fund requests that the Trustees authorize staff to pursue expanding the liquidity program by implementing a pre-event financing through the issuance of floating rate notes by the Florida Hurricane Catastrophe Fund Finance Corporation in the maximum amount that can be obtained at a cost-effective interest rate.

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