Summary
On June 26, 2009, The Hartford Financial Services Group, Inc. (the "Company") announced a significant capital infusion through its participation in the U.S. Department of the Treasury's TARP Capital Purchase Program. The Company entered into a definitive agreement with the Treasury to issue $3.4 billion in cash, which included 3,400,000 shares of Series E Fixed Rate Cumulative Perpetual Preferred Stock and a warrant to purchase over 52 million shares of common stock at an initial exercise price of $9.79. This transaction signifies a critical step for the Company to bolster its capital position during a period of financial market stress. The agreement also imposes certain restrictions on the Company, such as limitations on dividend payments exceeding $0.05 per share, equity redemptions, acquisitions, and executive compensation. Additionally, as a prerequisite for TARP participation, The Hartford completed the acquisition of Federal Trust Corporation on June 24, 2009.
Key Highlights
- 1The Hartford secured $3.4 billion in capital from the U.S. Department of the Treasury under the TARP Capital Purchase Program.
- 2The capital was raised through the issuance of 3,400,000 shares of Series E Fixed Rate Cumulative Perpetual Preferred Stock.
- 3A warrant was issued to the Treasury, giving it the option to purchase up to 52,093,973 shares of common stock at $9.79 per share.
- 4The agreement includes restrictions on the Company's ability to pay dividends above $0.05 per share, redeem or acquire equity, and executive compensation.
- 5The Company amended its Certificate of Incorporation to establish the terms of the new Series E Preferred Stock.
- 6As a condition for TARP participation, The Hartford acquired Federal Trust Corporation, the parent of Federal Trust Bank.
- 7The filing includes the executed agreements, warrant, and press release announcing the transaction.