On September 20th, United Insurance Holdings, L.C. (“United”) entered into a securities purchase agreement providing for the sale of $20 million of Senior Subordinated Notes to a New York based hedge fund. This transaction enabled its insurance subsidiary to secure $20 million in matching funds through the state of Florida. Raymond James’ Financial Services and Recapitalization & Restructuring Investment Banking Groups jointly advised United on the transaction.

Based in St. Petersburg, Fl, United provides property and casualty insurance in the State of Florida and is one of the ten largest providers of homeowners insurance based on premium volume. At June 30, 2006, United had approximately $148 million in assets and $26 million of shareholders' equity.

As a result of the unprecedented hurricane activity in 2004 and 2005, which saw eight hurricanes make landfall in Florida, the availability of property insurance became scarce. In an effort to stabilize the homeowners insurance market by attracting new capital, the Florida legislature passed the State of Florida Insurance Capital Build-Up Incentive Program, whereby the Florida State Board of Administration would provide matching surplus notes to an insurer who contributed new capital to its surplus in amount equal to the amount of the surplus note provided by the state.

With the assistance of Raymond James, United secured $20 million of capital in the form of five year equity-linked, senior subordinated notes. United Property and Casualty Insurance Company, United’s insurance subsidiary, secured $20 million in matching funds from the state through the issuance of 20-year surplus notes, which by statute provide for quarterly interest at a variable rate adjusted based on the 10-year U.S. Treasury Note. Among the statutory requirements of the Capital Build-Up Incentive Program are a minimum capital and surplus of $50 million and a prospective net homeowners’ premium to surplus of two to one.