Summary
The Hartford Financial Services Group, Inc. (HIG) filed an 8-K on April 18, 2013, to report on the closing of a material definitive agreement. Specifically, the company successfully sold $300 million in aggregate principal amount of its 4.300% Senior Notes due 2043. This transaction was executed under a Pricing Agreement and Underwriting Agreement with several underwriters, including Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated. The notes are unsecured senior obligations, ranking equally with other senior unsecured and unsubordinated debt of the company. The offering was registered under a prior Form S-3 filing. The net proceeds from this issuance will provide additional capital for the company. Investors should note the long-term maturity of these notes (30 years) and the specified interest rate of 4.300% per annum, paid semi-annually. The filing also details the terms of the senior indenture governing these notes, which includes covenants restricting the ability of the company and its subsidiaries to sell assets or create certain liens. The company retains the option to redeem the notes under specific conditions, tied to Treasury rates plus a spread, providing some flexibility but also potential for early repayment to bondholders under certain scenarios. The underwriters are entitled to a discount of 0.875% on the sale of these notes, and customary indemnification provisions are in place. This issuance represents a significant capital raising event for The Hartford.
Key Highlights
- 1The Hartford Financial Services Group, Inc. closed the sale of $300 million in 4.300% Senior Notes due 2043 on April 18, 2013.
- 2The notes are unsecured senior obligations of the company, ranking equally with other existing unsecured and unsubordinated debt.
- 3The offering was conducted through Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated as underwriters.
- 4The notes mature on April 15, 2043, indicating a long-term debt issuance.
- 5Interest on the notes is payable semi-annually at a rate of 4.300% per annum.
- 6The company has the option to redeem the notes early under specific conditions, including a 'make-whole' provision.
- 7The senior indenture governing the notes includes covenants that limit the company and its restricted subsidiaries from selling certain assets or creating specific liens.