Hartford to Accept as Much as $3.4 Billion From TARP

Hartford is not alone, many insurance companies are in bad shape and in need of a bailout. I only expect the problems to worsen for the industry as more losses in their portfolios are realized. The next show to drop will be commercial real estate loans as more stores and offices close their doors. I would avoid annuities at this time.-Lou

Hartford to Accept as Much as $3.4 Billion From TARP

June 12 (Bloomberg) -- Hartford Financial Services Group Inc. said it would accept as much as $3.4 billion in government bailout funds, capping a seven-month push to extend the U.S. financial-company rescue program to money-losing insurers.

Hartford also will sell as much as $750 million of common stock in a so-called discretionary equity issuance, the company, based in the Connecticut city of the same name, said today in a statement. The funds, to be raised over time in the market, may be used to repurchase

outstanding debt, the firm said.

Outgoing Chief Executive Officer Ramani Ayer, 62, turned to the government in November after asset declines depleted capital and a sagging stock price deterred private investors. The insurer is welcoming an investment from Treasury’s Troubled Asset Relief Program and the pay curbs that may come with it, even as banks led by JPMorgan Chase & Co. and Goldman Sachs Group Inc. raise capital to exit the government initiative.

“All this just shows how deep the problems were at Hartford,”

Robert Haines, an analyst with CreditSights Inc. said in an e-mail. “Others who had been looking for TARP cash were able to raise capital in the markets because of recent upturn. Hartford is raising capital, but as you can see they do not have capacity to raise enough.”

Hartford fell $1.03, or 7.3 percent, to $13.05 at 10:09 a.m. in New York Stock Exchange composite trading. The company has declined about 82 percent in the past 12 months.

Job Cuts

Ayer, whose firm lost $2.7 billion in 2008, braced for more asset declines by cutting jobs, slashing the dividend and pulling back from non-U.S. markets including Japan. He steered Hartford through the toughest year in its two centuries of history and announced his retirement after winning clearance for the bailout last month.

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