CORRECTION: The Phoenix’s previous stock buyback authorization was for 5 million shares, of which 700,000 remained unpurchased at expiration. The new authorization is for $25 million. Also, the company’s annual $3.5 million in savings is for interest.
The Phoenix Cos. Inc. has repurchased some of the debt issued by the Hartford insurer’s life unit for 75 cents on the dollar amid steps to curb long-term obligations and boost shareholder value, authorities say.
Phoenix, which announced a management restructuring Tuesday, paid $36.2 million cash for $48.3 million par amount of the outstanding 7.15 percent surplus notes due 2034 issued by Phoenix Life Insurance, the company disclosed in its Sept. 26 8-K filing with the Securities and Exchange Commission.
Phoenix bought back the bonds Sept. 21, a day after its board of directors authorized the purchase along with a new $25 million share buyback authorization, the filing said. It replaces the previous, 10-year-old authorization to buy back 5 million shares, of which all but 700,000 shares were repurchased, the insurer said.
Company officials said retiring early some of Phoenix Life’s debt shaves some $3.5 million annually from the unit’s interest expense.
Both actions also trim the parent’s leverage, while increasing book value per share, earnings per share and return on equity, the insurer said.
