Hartford Financial Services Group Inc.
) announced a cash tender offer to repurchase senior debt worth
$800 million. This includes $300 million aggregate principal
amount of the First Tranche Dutch Auction Notes, $150 million
aggregate principal amount of the Second Tranche Dutch Auction
Notes and $350 million of Waterfall Notes.
The First Tranche Dutch Auction Notes of Hartford Financial
include 7.3% debentures due 2015, 6.3% Senior Notes due 2018 and
6% Senior Notes due 2019. The Second Tranche Dutch Auction Notes
include 5.5% Senior Notes due 2016, 5.375% Senior Notes due 2017,
4% Senior Notes due 2017 and 4% Senior Notes due 2015.
The Waterfall Notes include 7.650% debentures due 2027, 7.375%
Senior Notes due 2031, 6.625% Senior Notes due 2042, 6.625%
Senior Notes due 2040, 5.95% Senior Notes due 2036 and 6.1%
Senior Notes due 2041.
This offer is a part of Hartford Financial's capital
management plan, announced with its fourth-quarter 2012 earnings.
The company plans to reduce its outstanding debt by $1 billion,
including repayment of debt worth $520 million, which is due in
2013 and 2014.
Additionally, Hartford Financial plans to issue new long-term
senior debt securities equal to a maximum of the amount of
Waterfall Notes repurchased. These debt repayments and issue of
senior debt securities will cumulatively reduce the total debt by
the ascertained amount.
The capital management plan also includes an extraordinary
dividend of $1.2 billion to be paid by Hartford Financial's
Connecticut-based life insurance companies and dissolution of its
Vermont life reinsurance captive. Additionally, the board
authorized a $500 million share repurchase program, which will
expire in 2014-end.
While Hartford Financial currently carries a Zacks Rank #4
(Sell), other multi-line insurance companies worth considering
CNO Financial Group Inc.
). All these are Zacks Rank #1 (Strong Buy) stocks.
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CNO FINL GRP (CNO): Free Stock Analysis
HARTFORD FIN SV (HIG): Free Stock Analysis
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