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Trading volume on shares of Hartford Financial (NYSE: HIG) surged on Thursday following the insurer’s pricing of its secondary stock offering. The offering is part of Hartford’s plan to raise capital in order to payback taxpayer money, a plan it announced yesterday.
Hartford, along with many other insurers received government aid following the bailout of AIG. The company risked possible liquidity failure when money markets were teetering as investors’ yanked cash from their accounts following the collapse of firms, such as Lehman Brothers.
“We appreciate the critical role the government and the American taxpayers have played in stabilizing the financial markets and we are pleased to announce a plan to repurchase Treasury’s investment in fewer than 10 months,” said Liam E. McGee, The Hartford’s Chairman, President and Chief Executive Officer.
“As we have said, we ended the year in a strong capital position, and our fourth quarter results reflected The Hartford’s third sequential quarter of improving core earnings,” added McGee.
The capital raise consists of a 52.3 million share common stock offering, priced at $27.75. Hartford is also issuing new debt notes to raise capital. The offering aims to raise an additional $1.1 billion through the sale of $300 million in five-year notes, $500 million in 10-year notes and $300 million in 30-year bonds.
The company plans to use the proceeds from the offering to repurchase the preferred shares the Treasury Department holds once it has received approval to do so.
Following the repayment, the U.S. Treasury Department will continue 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.
Though many companies have negotiated a price to repurchase warrants back from the Treasury, Hartford said it does not intend to repurchase the warrants.
The Treasury will likely auction off the Hartford warrants to help recover additional taxpayer money, as they have done with other financial institutions that did not repurchase them.
This article (Trading Volume Ramps Up In Hartford Financial (NYSE: HIG) Ahead Of TARP Repayment, Stock Offering) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.
Lending At Citigroup (NYSE: C), Other Bailed Out Banks Falls In January
Posted by: | CommentsThe Treasury Department reported Monday that new lending dropped 35 percent in January at the nine largest banks that still owe bailout money. However, average loan balances did rise 2 percent compared to December, the highest level since September.
The report is based on a survey by the Treasury Department, with January’s report being the last as the agency does not believe the aggregate month to month changes are meaningful any longer.
The nine banks surveyed were: Citigroup Inc. (NYSE: C), Fifth Third Bancorp (NSDQ: FITB), PNC Financial (NYSE: PNC), Hartford Financial Services (NYSE: HIG), Key Corp. (NYSE: KEY), Regions Financial (NYSE: RF), Suntrust Banks Inc. (NYSE: STI), Comerica Inc. (NYSE: CMA) and Marshall & Ilsley Corp. (NYSE: MI).
According to the January survey, the nine banks held 17 percent of the banking industry assets at the end of 2009. The first survey was conducted in November 2008, at that time 22 large banks that still owned taxpayer bailout money participated and represented roughly 60 percent on banking industry assets.
When the government passed the $700 billion bailout plan, one of the main goals was to stimulate lending by banks by providing well needed liquidity. That goal has had mixed results as lending has not really gained traction as banks digested heavy losses throughout 2009.
This article (Lending At Citigroup (NYSE: C), Other Bailed Out Banks Falls In January) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.
Report: Bank Of America (NYSE: BAC) Aims To Grow Business In China
Posted by: | CommentsBank of America (NYSE: BAC) is looking to expand its business operations in China, according to recent reports. The largest U.S. bank, based on assets, inherited a well established Asian investment banking business from Merrill Lynch when it acquired the bank.
According to a report by the Wall Street Journal, Bank of America is pondering the incorporation of a Chinese unit, locally in China. The move would likely require a capital injection from the bank to fund expansion of the unit.
China is one of few countries in the world that is currently growing at a rapid pace. Bank of America in recent months has been on a hiring initiative in the Asian region, possibly preparing for expansion in China and the surrounding area.
If the move is officially announced by Bank of America, the reception may not be warm domestically as the public may wonder why the bank isn’t focusing more on rebuilding in the U.S.
Bank of America reported a $194 million net loss in the fourth quarter of 2009 as it paid back TARP funds and continued to designate funds for loan losses. The result represented a massive improvement from the fourth quarter in 2008.
The bank was also more active in helping struggling borrowers stay in their homes during the period, extending relief to 460,000 homeowners, a trend Americans would like to see continued focus on as foreclosure rates still run high nationally.
Bank of America reported last week that its loan modification efforts jumped more than 60 percent in February, starting 20,666 trial modifications under the government’s Home Affordable Modification Program.
This article (Report: Bank Of America (NYSE: BAC) Aims To Grow Business In China) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.