Citizens Property Insurance delays sale of $1.5 billion bonds, sets 4.25% interest cap

By Cristal Cody

Springdale, Ark., May 30 - Citizens Property Insurance Corp. delayed the sale of $1.5 billion of high-risk account senior secured bonds because of poor market conditions in the week after Memorial Day, the issuer said Friday.

The Florida-based insurer also set a pricing cap on the interest rate at 4.25% for the series 2008A bonds, Sharon Binnun, chief financial officer, said in an interview.

The company plans to watch the market for the best time to price over the next couple of weeks, she said.

The bonds (A2/A+/) have maturities from March 1, 2011 through March 1, 2013.

Goldman, Sachs & Co. is the senior manager of the negotiated sale. Co-managers are Citigroup Global Markets, Merrill Lynch & Co., Morgan Stanley & Co., JPMorgan, Wachovia Bank, NA, Banc of America Securities LLC and Morgan Keegan & Co.

Proceeds will be used to provide resources to the high-risk account, which is used to policy claims and other expenses from future storms.

Citizens Property was created by the Florida Legislature to provide residential and commercial property and casualty insurance coverage in the state.

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