The Hartford Financial Services Group says it will offer shares of stock for sale, seeking new capital of up to $750m. The troubled insurer will use the proceeds for general corporate purposes, including the possible repurchase of outstanding debt.
The Hartford is attempting to recover its capital position after disastrous investment losses during the financial crisis. The company confirmed Friday that in addition to the share offer, it will participate in the U.S. Treasury's Capital Purchase Program – the federal bailout cash could provide up to three-point-four billion dollars in financing. CEO Ramani Ayer, who’s announced he will retire by the end of this year, spoke to WNPR’s Where We Live.
"From my standpoint what it does for the institution is it really puts us in a place where we are being prudent. Prudent because I’m still unsure as to where markets, both equity and credit markets are headed. There’s a lot of debate in the country as to whether we are now on a recovery path that will be sustained, or whether there is going to be a second leg to this market – another possible downturn." The $750m that the Hartford hopes to raise with its share offer represents about 17% of it’s market value, measured by its stock price at the time of the announcement. By the close Friday The Hartford’s shares had dropped once again, down more than 8%.