One life insurance company has decided to accept bailout funding, while another has decided to reject it.
Hartford Financial Services Corp. said it would take the $3.4 billion in capital it was authorized to receive through the Troubled Asset Relief Program. The decision was coupled with an announcement that the company would attempt to raise $750 million in a common stock offering.
"Today's decisions will further bolster our capital base and provide additional financial flexibility," said Lizabeth Zlatkus, The Hartford's chief financial officer, in a statement. "The discretionary equity issuance will allow us to be opportunistic in raising capital while reducing our financial leverage."
Principal Financial Group Inc. announced that it would not accept bailout money, having recently raised $1.9 billion through the sale of stocks and bonds.
The Hartford, like a number of other life insurance companies, bet heavily on derivatives instruments tied to the housing market and was burned when their value collapsed.
After Congress approved the $700 billion TARP plan, some bought savings and loans in order to qualify for the bailout program. The Hartford arranged to buy struggling Florida-based Federal Trust Corp.
Not all insurers, however, have been as eager as The Hartford to participate in TARP. Larry Zimpleman, Principal chief executive officer, pointed to improvements in the credit market as the main reason his company was declining government aid.
"We're seeing the capital markets in the U.S. returning to more normal functioning," Zimpleman said.
Hartford Financial Services Corp. said it would take the $3.4 billion in capital it was authorized to receive through the Troubled Asset Relief Program. The decision was coupled with an announcement that the company would attempt to raise $750 million in a common stock offering.
"Today's decisions will further bolster our capital base and provide additional financial flexibility," said Lizabeth Zlatkus, The Hartford's chief financial officer, in a statement. "The discretionary equity issuance will allow us to be opportunistic in raising capital while reducing our financial leverage."
Principal Financial Group Inc. announced that it would not accept bailout money, having recently raised $1.9 billion through the sale of stocks and bonds.
The Hartford, like a number of other life insurance companies, bet heavily on derivatives instruments tied to the housing market and was burned when their value collapsed.
After Congress approved the $700 billion TARP plan, some bought savings and loans in order to qualify for the bailout program. The Hartford arranged to buy struggling Florida-based Federal Trust Corp.
Not all insurers, however, have been as eager as The Hartford to participate in TARP. Larry Zimpleman, Principal chief executive officer, pointed to improvements in the credit market as the main reason his company was declining government aid.
"We're seeing the capital markets in the U.S. returning to more normal functioning," Zimpleman said.
published June 12, 2009, 0 Comments
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