Hartford Financial to Buyback Debt - Analyst Blog
08 Março 2013 - 2:55PM
Zacks
Recently, Hartford Financial Services Group
Inc. (HIG) announced a cash tender offer to repurchase
senior debt worth $800 million. This includes $300 million
aggregate principal amount of the First Tranche Dutch Auction
Notes, $150 million aggregate principal amount of the Second
Tranche Dutch Auction Notes and $350 million of Waterfall
Notes.
The First Tranche Dutch Auction Notes of Hartford Financial
include 7.3% debentures due 2015, 6.3% Senior Notes due 2018 and 6%
Senior Notes due 2019. The Second Tranche Dutch Auction Notes
include 5.5% Senior Notes due 2016, 5.375% Senior Notes due 2017,
4% Senior Notes due 2017 and 4% Senior Notes due 2015.
The Waterfall Notes include 7.650% debentures due 2027, 7.375%
Senior Notes due 2031, 6.625% Senior Notes due 2042, 6.625% Senior
Notes due 2040, 5.95% Senior Notes due 2036 and 6.1% Senior Notes
due 2041.
This offer is a part of Hartford Financial’s capital management
plan, announced with its fourth-quarter 2012 earnings. The company
plans to reduce its outstanding debt by $1 billion, including
repayment of debt worth $520 million, which is due in 2013 and
2014.
Additionally, Hartford Financial plans to issue new long-term
senior debt securities equal to a maximum of the amount of
Waterfall Notes repurchased. These debt repayments and issue of
senior debt securities will cumulatively reduce the total debt by
the ascertained amount.
The capital management plan also includes an extraordinary
dividend of $1.2 billion to be paid by Hartford Financial’s
Connecticut-based life insurance companies and dissolution of its
Vermont life reinsurance captive. Additionally, the board
authorized a $500 million share repurchase program, which will
expire in 2014-end.
While Hartford Financial currently carries a Zacks Rank #4
(Sell), other multi-line insurance companies worth considering are
AEGON N.V. (AEG), Ageas SA/NV
(AGESY) and CNO Financial Group Inc. (CNO). All
these are Zacks Rank #1 (Strong Buy) stocks.
AEGON N V (AEG): Free Stock Analysis Report
AGEAS-ADR (AGESY): Get Free Report
CNO FINL GRP (CNO): Free Stock Analysis Report
HARTFORD FIN SV (HIG): Free Stock Analysis Report
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