Hartford closes deal for $3.4B gov't investment

The Hartford Financial Services Group Inc. said Friday it has closed on its agreement with the Treasury Department for an investment of $3.4 billion in government bailout funds.

Part of the Troubled Asset Relief Program, or TARP, the government's investment in the insurer is in the form of preferred shares that have an annual dividend rate of 5 percent for the first five years and 9 percent after that. The Treasury also received warrants to buy up to $510 million of common stock at an exercise price of $9.79 per share.

Hartford was one of six major life insurers that won approval in May from the government granting access to the $700 billion bailout program. A number of life insurers had been seeking federal aid in the wake of major investment losses resulting from the financial market turmoil of last fall and early this year.

Allstate Corp., Lincoln National Corp., Prudential Financial Inc., Ameriprise Financial Inc. and Principal Financial Group Inc. were also approved for funding, but besides Hartford only Lincoln National has said it plans accept the money.

Hartford shares dipped 13 cents to $11.97 in afternoon trading Friday.