June 29, 2009 at 08:00 PM
Hartford Financial Services Group Inc. has decided to sell the U.S. Treasury Department $3.4 billion in perpetual preferred stock.
Hartford Financial, Hartford, is taking the full amount of funding available through the department’s Capital Purchase Program.
Accepting the CPP funding “further enhances our financial flexibility and our capacity to weather significant deterioration in the equity and debt markets, as well as the general economy,” Hartford Chairman Ramani Ayer says in a statement.
The Treasury Department will be getting non-voting senior preferred shares with a cumulative annual dividend of 5% for the first 5 years and 9% in later years.
The department also will get warrants to buy $510 million in common stock, or 15% of the amount of the preferred investment. The exercise price of the warrants is $9.79 per share.
Hartford also has the ability to issue up to $750 million in equity at its discretion, the company says.
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