The Connecticut-based insurer said it has $2 billion more than it needs to qualify for a AA credit rating. Hartford's extra cushion was funded primarily from a $2.5 billion capital infusion from Germany's Allianz SE on Oct. 6.
"In addition, should market conditions become more severe, we have access to additional sources of capital without tapping public markets or other capital-raising options. These sources include capital in the parent company and the property and casualty subsidiaries, a $500 million contingent capital facility and a $1.9 billion bank credit facility," Hartford CEO Ramani Ayer said.
Add to that, the company could get a hold of more cash as the Treasury took the drastic step last week of announcing it will extend TARP investments to insurers.
But the Hartford public relations blast probably wouldn't have mattered for Fitch Ratings and Moody's Investor Services, as each downgraded Hartford. Moody's cut its unsecured debt rating on the insurer Monday one notch to A3 while Fitch downgraded Hartford to A (already one notch below its assertion that it's strong enough for a AA) from A+ on Oct. 31. Both rating agencies drew concern to the company's net loss of $2.6 billion in the third quarter for the company. Furthermore, Fitch also pointed to "the current volatile credit and investment market
conditions, which are negatively impacting its asset portfolio as well
as earnings and capital needs in its variable annuity business." - Gerald Magpily
See story about Moody's downgrade from Reuters
See Hartford press release
See related story from Clusterstocks
Hartford Financial Services Group Inc. wants to set the record straight. The insurance company insisted on Monday it has more than enough money to weather the financial storm after its stock took a major hit last week on rumors of its weak financial health.
