Allianz will purchase £426m of preferred shares at £17.60 per share convertible to common stock after receipt of applicable approvals and £1bn of 10 per cent junior subordinated debentures.
The debentures are callable by The Hartford at par beginning ten years after issuance.
Allianz SE will also receive warrants which entitle it to purchase £1bn of common stock at an exercise price of £14.36 per share, subject to shareholder approvals.
The warrants expire in seven years.
The Hartford’s chairman and chief executive officer Ramani Ayer says: “We are pleased that Allianz, one of the world’s leading insurers and financial services providers, will make such a significant investment in The Hartford. We are taking decisive action to ensure that The Hartford remains well capitalised for long-term success. This investment strengthens our ability to weather volatile markets and continue to invest and vigorously compete in our businesses. We are dedicated to honoring our commitments to customers.”
Allianz SE chairman of the board of management and chief executive officer Michael Diekmann says: “We believe in the fundamental strength of the US economy and its insurance industry and respect The Hartford as a great insurance brand. We anticipate a favourable return on our investment.”