Summary
The Hartford Financial Services Group, Inc. (HIG) has filed an 8-K to report an amendment to its credit agreement. The key change is a reduction in the minimum consolidated net worth financial covenant to $9 billion. This amendment also sets the stage for an Amended and Restated Credit Agreement to become effective upon the consummation of the previously announced sale of Hartford Life, Inc. and certain other subsidiaries (the Talcott Sale). This updated credit facility will provide access to revolving loans and letters of credit totaling up to $750 million, with an option for expansion. The Amended and Restated Credit Agreement will carry new financial covenants, including the $9 billion minimum net worth and a 35% limit on consolidated total debt to consolidated total capitalization. These changes reflect the company's evolving structure post-divestiture and aim to provide ongoing financial flexibility.
Key Highlights
- 1Amendment to the $1 billion Five-Year Credit Agreement, dated October 31, 2014.
- 2Reduction of the minimum consolidated net worth financial covenant to $9 billion.
- 3The Amended Credit Agreement will be replaced by an Amended and Restated Credit Agreement upon completion of the Talcott Sale.
- 4The new credit facility will provide up to $750 million in revolving loans and letters of credit.
- 5The Amended and Restated Credit Agreement allows for a potential increase in the credit facility by an additional $500 million.
- 6New financial covenants include a $9 billion minimum consolidated net worth and a 35% limit on consolidated total debt to consolidated total capitalization.
- 7Borrowings under the new agreement are for general corporate purposes.