Hartford Financial Services Group Inc. said Friday it has taken $3.4 billion of federal bailout money, the maximum it was authorized to accept, to bolster capital in the wake of large investment losses.
The Hartford, Connecticut-based company is one of six insurers that won preliminary government approval last month to participate in the Troubled Asset Relief Program.
Four of the other five insurers decided not to accept bailout funds. The sixth, Lincoln Financial Group, said on June 15 it would accept up to $950 million.
Like most TARP recipients, Hartford is issuing to the government preferred shares that carry an initial 5 percent dividend. It said the government also got warrants to buy up to $510 million of common stock at $9.79 per share.
Chief Financial Officer Lizabeth Zlatkus said in a statement it is prudent for Hartford to hold additional capital “until such time as the markets, as well as the broader economy, are on more stable footing.”
Hartford lost $2.75 billion in 2008, hurt by investment losses and the cost of guarantees it provided to holders of variable annuities.
The insurer also said it plans to limit sales under a previously announced plan to sell up to $750 million of common stock. It said it has issued 1.2 million shares so far.
Hartford shares fell 9 cents to $12.01 in afternoon trading on the New York Stock Exchange. They closed one year ago at $67.01, Reuters data show.
(Reporting by Jonathan Stempel; editing by Andre Grenon)