By Ronda Fears
Nashville, May 20 - The Hartford Financial Services Group Inc. sold $600 million of three-year mandatory convertibles at par of 50 to yield 7.0% with a 25% initial conversion premium via bookrunner Goldman Sachs & Co.
The mandatory sold at the tight end of yield talk as well as the aggressive end of revised premium guidance of 21% to 25%. Originally the premium was talked at 18% to 22% and the yield at 7.0% to 7.5%.
Also Monday, Hartford sold $1.1 billion of stock at $45.50 per share and $250 million of straight debt. The 2.375% three-year notes were priced at 99.884 to yield 2.415% or 77 basis points over Treasuries.
Hartford intends to contribute about $1.5 billion of total proceeds to the capital of its property-casualty operations and $150 million to the capital of its life operations. The balance would be used for general corporate purposes, including contributions to its pension plan and subsidiaries.
Last week, Hartford announced the capital-raising plans after boosting its asbestos reserves by $2.6 billion.
Terms of the deal are:
Issuer: The Hartford Financial Services Group Inc.
| Issue: | Mandatory convertible preferreds
|
| Bookrunner: | Goldman Sachs & Co.
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| Joint lead managers: | Morgan Stanley and UBS Warburg
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| Co-managers: | A.G. Edwards & Sons Inc., Banc of America Securities, Citigroup, Edward D. Jones & Co., JPMorgan, Merrill Lynch & Co., SunTrust Robinson Humphrey, Wachovia Securities and Wells Fargo Securities
|
| Amount | $600 million
|
| Greenshoe: | $90 million
|
| Maturity: | May 25, 2006
|
| Dividend: | 7.0%
|
| Price: | Par, $50
|
| Yield: | 7.0%
|
| Conversion premium: | 34%
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| Conversion price: | $45.50/$56.88
|
| Conversion ratio: | 0.879/1.099
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| Call: | Non-callable
|
| Expected Ratings: | Moody's: A2
|
| S&P: A-
|
| Fitch: A
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| Settlement: | May 23
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