The Hartford To Repay TARP Money

The Hartford said it would conduct a public offering of equity and debt securities as part of a plan to repay the $3.4 billion it took from the federal government as part of the Treasury’s Capital Purchase Program, also known as the Trouble Asset Relief Program (TARP).

“We appreciate the critical role the government and the American taxpayers have played in stabilizing the financial markets and we are pleased to announce a plan to repurchase Treasury’s investment in fewer than 10 months,” said Liam E. McGee, The Hartford’s chairman, president and chief executive officer.

The offerings will consist of $1.45 billion of common stock and $500 million of mandatory convertible preferred stock. The debt offering related to the repurchase of the government’s preferred stock will consist of $425 million of senior notes. In addition, the company will pre-fund the repurchase of its senior debt maturing in 2010 and 2011 by issuing an additional $675 million of senior notes.

The company plans to use the proceeds of the offering to repurchase the Treasury’s preferred shares once it has received approval to do so. Following the repayment, the U.S. Treasury Department will continue to hold warrants to purchase approximately 52 million shares of The Hartford’s common stock at an initial exercise price of $9.79 per share. The company does not intend to repurchase the warrants.

“The Hartford always viewed this investment as temporary capital and intended to return it as soon as it was prudent. As we have said, we ended the year in a strong capital position, and our fourth quarter results reflected The Hartford’s third sequential quarter of improving core earnings,” McGee said.