Kingsway holds $17 million in Lehman investments

Canadian vehicle insurer Kingsway Financial Services Inc. said Wednesday that its $3.3 billion invested securities portfolio includes $17 million of par value fixed income investments in Lehman Brothers Holdings Inc.

The Lehman investments include $3 million of subordinated debt and $14 million of senior notes, the company said.

Lehman filed for bankruptcy protection on Monday and later said it would sell its North American investment banking and trading operations to Barclays PLC for just $250 million.

Kingsway also said it also holds about $30.3 million of par value fixed income investments in certain subsidiaries of American International Group Inc., one of the world's largest insurers, but doesn't have any investment exposure to AIG or any of its other subsidiaries. On Tuesday, the government stepped in to bail out AIG with an $85 billion loan when the insurance giant appeared ready to topple.

In addition, the company said it has no investment in Washington Mutual Inc. or any derivatives exposure to any of the other companies. Shares of Washington Mutual, the nation's largest savings and loan, have plummeted in recent weeks amid continued concerns about mounting losses in the bank's lending portfolios.

Kingsway also said that it expects its gross losses from Hurricane Ike to fall within the limits of its catastrophe reinsurance protection which caps the net loss to $2 million before taxes.

Kingsway shares fell 35 cents, or 4.8 percent, to $6.89 in afternoon trading.