Daily Truth Pills

Hosea 4:6 My people are destroyed for lack of knowledge…

Allstate’s Catastrophe Bonds Face ‘Imminent’ Default

Posted by truthpills on 2009/02/02

By Neil Unmack and Oliver Suess

Feb. 2 (Bloomberg) — A catastrophe bond sold by Allstate Corp. faces “imminent” default following the collapse of Lehman Brothers Holdings Inc., Standard & Poor’s said. It would be only the second such security to fail in a decade.

New York-based S&P downgraded $250 million of debt sold by Allstate’s Willow Re Ltd. to D, the lowest grade, from CC, according to a Jan. 30 statement. Northbrook, Illinois-based Allstate sold the bonds in 2007 to protect against losses caused by U.S. hurricanes.

“The issuer has notified Standard & Poor’s that it will not have sufficient funds to make the scheduled interest payment,” S&P analyst Gary Martucci in New York wrote in the statement.

Read the full article

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