LUMBERMENS MUTUAL: Kemper parent to default on bonds

Lumbermens Mutual Casualty Co., the parent of Kemper Insurance Cos., said Tuesday that it will default on $700 million of bonds and offered to buy them back at 10 cents on the dollar.

Published on March 26, 2003

Illinois insurance regulators prohibited the company from making interest payments in June and July on the bonds, Lumbermens spokeswoman Linda Kingman said.

Analysts said the default stems from a failed expansion effort, in which the insurer charged too little for policies and spread itself too thin.

The buyback offer is valid through May 1, the company said.

Kemper announced this month it would stop underwriting policies and sell its main businesses to Swiss Re's Securitas Capital LLC and other private-equity funds.

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