The Hartford Financial Services Group Inc. has closed on the $2.5 billion capital investment by Allianz SE, Europe’s biggest insurer.
The Hartford and German-based Allianz announced the investment on Oct. 6, the day the Hartford-based insurer said it would post a sizable third-quarter loss due to storm and investment losses.
As previously agreed, Allianz purchased, at $31 per share, $750 million of preferred shares convertible to common stock after receipt of applicable approvals, and $1.75 billion of 10 percent junior subordinated debentures.
The debentures are callable by The Hartford at par beginning ten years after issuance. Allianz SE also received warrants which entitle it to purchase $1.75 billion of common stock at an exercise price of $25.32 per share, subject to shareholder approvals. The warrants expire in seven years.
“This investment strengthens our capital position and enhances our ability to weather volatile markets while we vigorously compete in our businesses,” The Hartford’s chairman and chief executive officer Ramani Ayer said in a statement.
