BRADENTON, Fla. — The Florida Hurricane Catastrophe Fund still plans to pursue pre-event funding during the coming months, most likely in the municipal bond market.

Earlier this year, a financing up to $1.7 billion had been discussed.

The state-run, nonprofit reinsurer still is in “serious discussions” about a financing, the agency’s executive director, Jack Nicholson, told FHCF advisory board members Tuesday.

Several board members said they supported selling bonds or notes to provide liquidity — or quick access to cash — to pay claims immediately after a hurricane. Such a financing would be considered “pre-event” bonding and sold on a taxable basis.

Board members also said they felt it would be easier to sell bonds before a catastrophe than afterward, and it would reduce the risk or uncertainty that bonds could not be sold due to problems in the market. “We’re still pursuing [a financing],” Nicholson said. “This is a way of managing risk.”

Trustees for the State Board of Administration, which is composed of Gov. Rick Scott and two elected Cabinet members, would have to sign off on any financing. Nicholas said there is no date to bring the issue before the SBA trustees. He could not be reached for further details on the finance plan after Tuesday’s meeting.

The FHCF currently has $3.5 billion of outstanding taxable, floating-rate notes that were issued in 2007 to provide claims-paying liquidity. The notes have a bullet maturity on Oct. 15.

In an update on current market conditions and prospective borrowing from the market after a hurricane, the agency’s financial advisor said the outlook is similar to what it was in May when the last bond capacity report was done.

Though there still is uncertainty about the forecast for economic and political reasons, the municipal market remains robust and interest rates continue to be low, said Kapil Bhatia of Raymond James & Associates Inc.

The Cat Fund has provided $17.02 billion in property reinsurance coverage to private companies and Florida’s Citizens Property Insurance Corp. from June 1 through May 31, 2013. A fund balance of $8.5 billion is projected by the end of this year, leaving $8.52 billion to be raised from the bond market.

Up to $7 billion could be borrowed within a year after a storm, according to a survey averaging the responses of four senior managers. They also projected that an additional $6 billion of bonds could be issued within two years.

The combined bond capacity and fund balance gives the reinsurer $15.5 billion in claims-paying capacity within one year, Bhatia said.

The FHCF has built up a large fund balance because no major hurricanes have hit the state since Hurricane Wilma in 2005. This year’s hurricane season technically ends November 30. The Cat Fund has about $1.88 billion of outstanding tax-exempt revenue bonds rated AA by Fitch Ratings, AA-minus by Standard & Poor’s, and Aa3 by Moody’s Investors Service.

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