8-KMaterial AgreementsRegulation FDExhibits & Filings

HARTFORD INSURANCE GROUP, INC. 8-K Report, Material Agreement (Mar 31, 2010)

Filed March 31, 2010For Securities:HIGHIG-PG

Summary

The Hartford Financial Services Group, Inc. (HIG) filed an 8-K on March 31, 2010, to report a significant material definitive agreement. The company entered into a Repurchase Agreement with the U.S. Department of the Treasury to repurchase all 3,400,000 shares of its Series E Fixed Rate Cumulative Perpetual Preferred Stock for $3.4 billion, plus a final accrued dividend of $21.7 million. This preferred stock, along with a warrant to purchase common stock, was originally issued to the Treasury in June 2009 as part of the Troubled Asset Relief Program (TARP) Capital Purchase Program. This repurchase signifies The Hartford's ability to exit the TARP program and return capital to the government. The agreement also outlines the company's obligation regarding the warrant by April 15, 2010, with The Hartford having previously announced its intention not to repurchase the warrant. The filing also includes a press release announcing this transaction, reinforcing the company's progress in managing its financial obligations and strengthening its capital structure.

Key Highlights

  • 1The Hartford repurchased $3.4 billion of its Series E preferred stock from the U.S. Department of the Treasury.
  • 2This transaction marks a step towards exiting the Troubled Asset Relief Program (TARP).
  • 3The repurchase included a final accrued dividend payment of $21.7 million.
  • 4The original issuance to the Treasury in June 2009 included both preferred stock and a warrant to purchase common stock.
  • 5The company must address the Treasury's warrant by April 15, 2010.
  • 6The Hartford has publicly stated its intention not to repurchase the warrant.
  • 7The filing includes the Repurchase Letter Agreement and a related press release as exhibits.

Frequently Asked Questions

The main event is The Hartford's repurchase of all its Series E preferred stock held by the U.S. Department of the Treasury for $3.4 billion, plus a final dividend. This action signifies the company's exit from the TARP Capital Purchase Program.

In June 2009, the Treasury invested $3.4 billion in The Hartford in exchange for preferred stock and a warrant to purchase the company's common stock.

The Hartford must notify the Treasury by April 15, 2010, whether it intends to repurchase the warrant or provide a substitute warrant. However, the company has already announced it does not intend to repurchase the warrant.

This repurchase suggests that The Hartford has strengthened its financial position sufficiently to repay government capital and is moving away from TARP-related obligations. This could be viewed positively by investors as a sign of financial recovery and reduced government influence.