Under the terms of the binding agreement, Allianz will purchase, at $31 per share, $750 million in preferred shares convertible to common stock.
Facing third-quarter losses of more than $2 billion, Hartford (Conn.) Financial Services Group Inc. said today that it will receive $2.5 billion in capital from insurance giant Allianz SE.
Under the terms of the binding agreement, Allianz will purchase, at $31 per share, $750 million in preferred shares convertible to common stock.
Frankfurt, Germany-based Allianz also will also receive warrants, expiring in seven years, that entitle it to purchase $1.75 billion of Hartford’s common stock at an exercise price of $25.32 per share, subject to shareholder approvals.
The Hartford is estimating a net third-quarter loss of $8.05 to $8.80 a share, which includes net realized capital losses of roughly $2.2 billion. Some 75% of those losses are related to investments in the financial-services sector.
With the investment by Allianz, Hartford is projecting a capital margin of $3.5 billion to finish the year.
“This investment strengthens our ability to weather volatile markets and continue to invest and vigorously compete in our businesses,” Hartford chairman and chief executive Ramani Ayer said in a statement.