By Anurag Kotoky
BANGALORE, March 16 (Reuters) - Hartford Financial Services Group Inc said it will offer shares and notes, as the insurer seeks to repay $3.4 billion in taxpayer money it received under the U.S. government's bailout of the financial system.
Shares of the giant life and property insurer fell as much as 3 percent after the bell.
The Connecticut-based company said it will offer $1.45 billion of common stock and $500 million of mandatory convertible preferred stock, and will also pre-fund the repurchase of its senior debt by issuing an additional $675 million of senior notes.
Related to the repurchase of the government's preferred stock, the company will offer a further $425 million of senior notes.
However, Hartford does not intend to repurchase 52 million share warrants that the Treasury holds.
The company expects to incur a charge of $440 million related to the repurchase of preferred stock, it said in a regulatory filing.
Separately, Fitch Ratings said it views the replacement of Treasury funds with more permanent capital market financing as marginally positive for the company as it demonstrates an overall improved financial position and increased access to capital markets.
However, the ratings agency expressed concerns about Hartford's exposure to the volatile credit and investment market conditions, particularly in its life asset portfolio where it has above average credit risk exposure to commercial real estate related investments.
Hartford, which competes with MetLife Inc, AIG and Assurant Inc among others, expects to report proforma profit of $2.60 to $2.90 a share for 2010, slides in the filing showed.
Last month, it forecast 2010 core earnings per share of $3.70 to $4.00.
Analysts are currently expecting earnings of $3.98 a share, according to Thomson Reuters I/B/E/S.
Hartford had to raise billions of dollars in private and public transactions last year, slash its dividend and lay off staff to stabilize its financial position, after incurring hefty credit losses.
But last month, Hartford return to profitability for the first time since mid-2008, as rising stock markets helped bolster investment income in its life insurance business.
Later that month, it named Christopher Swift, a former American International Group Inc executive, as chief financial officer.
Hartford shares closed at $27.26 Tuesday on the New York Stock Exchange. They traded as low as $6.10 last March after the company suffered massive losses on stock market-linked annuities and investments.
Shares of the company were the third best performer among financial companies a year after the S&P 500 stock index hit a 12-year market low last March.
(Reporting by Anurag Kotoky in Bangalore; Editing by Maju Samuel) Keywords: HARTFORD/ (anurag.kotoky@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: anurag.kotoky.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
BANGALORE, March 16 (Reuters) - Hartford Financial Services Group Inc said it will offer shares and notes, as the insurer seeks to repay $3.4 billion in taxpayer money it received under the U.S. government's bailout of the financial system.
Shares of the giant life and property insurer fell as much as 3 percent after the bell.
The Connecticut-based company said it will offer $1.45 billion of common stock and $500 million of mandatory convertible preferred stock, and will also pre-fund the repurchase of its senior debt by issuing an additional $675 million of senior notes.
Related to the repurchase of the government's preferred stock, the company will offer a further $425 million of senior notes.
However, Hartford does not intend to repurchase 52 million share warrants that the Treasury holds.
The company expects to incur a charge of $440 million related to the repurchase of preferred stock, it said in a regulatory filing.
Separately, Fitch Ratings said it views the replacement of Treasury funds with more permanent capital market financing as marginally positive for the company as it demonstrates an overall improved financial position and increased access to capital markets.
However, the ratings agency expressed concerns about Hartford's exposure to the volatile credit and investment market conditions, particularly in its life asset portfolio where it has above average credit risk exposure to commercial real estate related investments.
Hartford, which competes with MetLife Inc, AIG and Assurant Inc among others, expects to report proforma profit of $2.60 to $2.90 a share for 2010, slides in the filing showed.
Last month, it forecast 2010 core earnings per share of $3.70 to $4.00.
Analysts are currently expecting earnings of $3.98 a share, according to Thomson Reuters I/B/E/S.
Hartford had to raise billions of dollars in private and public transactions last year, slash its dividend and lay off staff to stabilize its financial position, after incurring hefty credit losses.
But last month, Hartford return to profitability for the first time since mid-2008, as rising stock markets helped bolster investment income in its life insurance business.
Later that month, it named Christopher Swift, a former American International Group Inc executive, as chief financial officer.
Hartford shares closed at $27.26 Tuesday on the New York Stock Exchange. They traded as low as $6.10 last March after the company suffered massive losses on stock market-linked annuities and investments.
Shares of the company were the third best performer among financial companies a year after the S&P 500 stock index hit a 12-year market low last March.
(Reporting by Anurag Kotoky in Bangalore; Editing by Maju Samuel) Keywords: HARTFORD/ (anurag.kotoky@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: anurag.kotoky.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.