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UPDATE 1-Tower Group sees Q3 charge, catastrophe loss

Thu Oct 9, 2008 8:06am EDT

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Oct 9 (Reuters) - Insurance company Tower Group Inc (TWGP.O) said it expects to record a non-cash impairment charge of $2.1 million in the third quarter related to bonds issued by recently bankrupt Lehman Brothers Holdings Inc (LEHMQ.PK), and said it does not hold any other securities issued by the company.

The New York-based Tower Group said it expects an unrealized loss of $1 million, related to its ownership of $3 million of securities issued by American International Group Inc (AIG.N), AIG Global Funding and International Lease Finance Corporation bonds as of Sept. 30.

Tower Group also expects a loss of $700,000 in the third quarter, resulting from claims after Hurricane Ike, it said in a statement.

The company does not own any Fannie Mae (FNM.N) and Freddie Mac (FRE.N) preferred stock or any securities issued by Washington Mutual (WAMUQ.PK), it said.

Tower Group said it does not expect the net effect of these items to have a material impact on its operating results for the third quarter of 2008.

Shares of the company closed at $20.85 Wednesday on Nasdaq. (Reporting by Anurag Kotoky in Bangalore; Editing by Jarshad Kakkrakandy)

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