Not that Warren Buffett wouldn’t be the cat’s meow anywhere; but, in Florida we’re talking “cat” as in catastrophe bonds – and according to this story from Reuters (h/t CLS)
Florida officials agreed to pay Warren Buffett’s Berkshire Hathaway Inc …$224 million for a conditional pledge to buy $4 billion of state hurricane bonds during 2008, a state spokesman said on Thursday.
Vulnerable to big storms, Florida runs a reinsurance operation called the Hurricane Catastrophe Fund that can issue tax-free bonds to pay insurers’ claim losses beyond agreed caps.
The Berkshire agreement, approved on Wednesday by Florida’s governor, chief financial officer and attorney general, requires Berkshire to buy $4 billion of 30-year tax-free bonds with a 6.5 percent coupon, if the state fund incurs total storm-related claims this year of more than $25 billion.
A related article in the Orlando Sentinel added local color. Continue reading “Warren Buffett is the cat's meow in Florida”