Washington (AP) - The government has raised $706.3 million from the sale of warrants it held in The Hartford Financial Services Group. It was the latest move to recoup costs for taxpayers from the $700 billion financial bailout.
The Treasury Department said Wednesday that it sold 52.1 million warrants at a price of $13.70 per warrant. The government had set a minimum bid price of $10.50 per warrant for the warrants. A warrant gives the purchaser the right to buy common stock at a fixed price.
The government obtained the warrants when it provided Hartford Financial, headquartered in
Sales of the warrants will sever the remaining ties Hartford Financial has with the bailout fund, known as the Troubled Asset Relief Program.
Financial institutions have been eager to cut all ties to the TARP to escape various restrictions, including limits on dividend payments and executive compensation.
By purchasing the warrants, holders will have the right to buy an equal amount of shares of Hartford Financial stock at a price of $9.79.
The auction price of $13.70 means that the stock would need to be selling at $23.49 per share for an investor to recoup the $13.70 paid for the warrant and the option price of $9.79 per share.
Hartford Financial shares fell 78 cents, or 3.4 percent, to $22.38 in trading Wednesday. They have traded over the past year in a range of $18.81 to $30.46.
Last week, the government raised $213.7 million from the sale of 13.05 million warrants it held in Lincoln National Corp., an insurance company which goes by the name Lincoln Financial Group.
Lincoln National and Hartford Financial were among several insurance companies that sought help from the government after they incurred large investment losses during the financial crisis.