Insurance firm The Hartford (HIG) announced that they'll be repurchasing the $3.4billion TARP investment they accepted last June.
HARTFORD, Conn., Mar 31, 2010 (BUSINESS WIRE) -- The Hartford Financial Services Group, Inc. (NYSE: HIG) today announced that it has repurchased all of The Hartford's preferred shares issued to the U.S. Department of Treasury under the Capital Purchase Program (CPP).
"We are pleased to complete our plan to return the U.S. Treasury's investment in The Hartford and appreciated the opportunity to participate in CPP and the support of the government and American taxpayers," said Liam E. McGee, The Hartford's Chairman, President and Chief Executive Officer. "With the capital raise completed and the investment repaid, we are well positioned from both a capital and balance sheet perspective."
The Hartford paid $3.4 billion to the U.S. Treasury to repurchase the preferred stock, plus a final dividend payment of about $21.7 million. The Hartford funded the repurchase with proceeds from its recent equity and debt offerings, as well as from available resources. The U.S. Treasury continues to hold warrants to purchase approximately 52 million shares of The Hartford's common stock at an initial exercise price of $9.79 per share. The company does not intend to repurchase the warrants from the U.S. Treasury.
I hope no one missed that above. Treasury has warrants to purchase 52million shares at $9.79....while the shares are current trading at $28.54!!!!!!!!! Those warrants are worth $973million, on a $3.4billion investment, not even including the 5% dividends!
Trade of the year!!! Do Hartford shareholders know that the exercised warrant profits will come out of their pockets? I'm not sure, as the stock is up 1.8% today....
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