Standard & Poor’s Ratings Services has removed Louisiana Citizens Property Insurance Corp. bonds from its CreditWatch negative list and upgraded the bonds’ outlook to stable.
“Probably the most important thing was they were able to collect all the assessments they needed in the first quarter and performed just as well in the second quarter,” said Alex Fraser, an analyst in Standard & Poor’s Dallas office.
Citizens covers homeowners, and some businesses, that cannot get insurance in the private market. The state-run insurer borrowed around $1 billion in bond financing to cover the damages its policyholders suffered during Hurricane Katrina. The state’s insurance companies are assessed a fee, which is usually passed on to customers, to help pay off the bonds.
Insurance Commissioner Jim Donelon said he expects other ratings agencies will do the same as Standard & Poor’s.
The upgrade would only affect Citizens’ ability to issue bonds at some later date, Donelon said.
But the upgrade signals bondholders, policyholders, businesses and individuals that Citizens and its business practices are solid and functional, Donelon said, and that bond payments and claims will be paid.
Information from: The Advocate, www.2theadvocate.com.
Topics Louisiana
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