American Safety Insurance Group, Ltd. Obtains Property Through Foreclosure After Loan Default in Investment Portfolio.HAMILTON, Bermuda--(BUSINESS WIRE)--April 19, 1999-- American Safety Insurance Group, Ltd. (NYSE NYSE See: New York Stock Exchange :ASI ASI, n See Anxiety Sensitivity Index. ) today announced that it has obtained title through foreclosure to a 172-acre parcel of property located in Ponce Inlet, Florida Ponce Inlet is a town in Volusia County, Florida, United States. The population was 2,513 at the 2000 census. As of 2004, the population recorded by the U.S. Census Bureau is 3,178 [1]. , south of Daytona Beach Daytona Beach (dātō`nə), city (1990 pop. 61,921), Volusia co., NE Fla., on the Atlantic coast and Halifax River (a lagoon); inc. 1876. Center of a rapidly urbanizing area, in a region settled by Spanish Franciscans in the 17th cent. . The property secured a loan purchased in May 1998 by the Company's subsidiary, American Safety Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. , Ltd., from an affiliate of Citibank Mortgage Corp. The secured loan was originally made to Ponce Marina, Inc. in connection with its planned development of condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. units, a marina, a yacht club, a beach club and a par 3 golf course. The secured loan had an original principal amount of $8,850,000. American Safety Re purchased the secured loan at a discount, and with additional advances made to the developer and related property costs incurred, American Safety Re's investment, to date, totals $7,859,897. The developer was unable to obtain construction financing for the property and failed to make a $6,400,000 payment on the secured loan due March 31, 1999. Immediately following the developer's default, American Safety Re obtained a judgment against the developer for $12,117,857 (which includes accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. ), foreclosed on the property, and received a certificate of title to the property on April 13, 1999. The property has recently been appraised for a third party by an independent appraiser A person selected or appointed by a competent authority or an interested party to evaluate the financial worth of property. Appraisers are frequently appointed in probate and condemnation proceedings and are also used by banks and real estate concerns to determine the market for an amount substantially in excess of American Safety Re's investment. The property currently is being marketed for sale, and the Company is evaluating a proposal from a prospective purchaser. As a result of the developer's default under the secured loan, the Company expects that interest on notes receivable for the second quarter of 1999 will be reduced by approximately $253,000, or $0.04 per share. Commenting on the announcement, Lloyd A. Fox, President and Chief Executive Officer of American Safety Insurance Group, Ltd., said, "While we are disappointed in the developer's default on the secured loan, we have been able to take control of the property quickly and believe we ultimately will recover our investment or more. Based on the appraisal of the property, we believe the property's value is substantially in excess of our investment and the property is an attractive development in a popular Florida resort area. We expect that current favorable business prospects, including the sale of the property for more than our investment, should substantially offset the reduction in interest on notes receivable during the balance of 1999." American Safety Insurance Group, Ltd. is a specialty insurance and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. holding company which, through its subsidiaries, develops, underwrites, manages and markets primary casualty insurance and reinsurance programs in the alternative insurance market for environmental risks, employee leasing and staffing industry risks, and other specialty risks, as well as providing a broad range of financial services and products to middle market businesses. The forward-looking statements in this news release involve risks and uncertainties and are subject to change based on various factors, including competitive conditions in the insurance industry, unpredictable developments in loss trends, changes in loss reserves, market acceptance of new coverages and enhancements, and changes in levels of general business activity and economic conditions. |
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