Insurance Groups In Hunt For Capital
October 9, 2008
NEW YORK, Oct. 9 (UPI) -- Two large U.S. insurance companies with troubled balance sheets have begun to hunt for capital to help stay afloat, the companies said.
MetLife and The Hartford Financial Services Group said they were initiating plans to raise cash, The New York Times reported Thursday.
MetLife, which saw its share value fall 27 percent on the stock market Wednesday, announced an offer to sell 75 million shares at $26.50 a share. The Hartford group said it would raise $2.5 billion.
Allstate shares also fell hard in trading Wednesday, down 21 percent, apparently on concerns that it would also have to raise capital, the Times said.
On Wednesday, the Federal Reserve bank said it would extend a new line of support for American International Group, which said last week it had already drawn down $61 billion of an $85 billion federal line of credit granted Sept. 17.
Under the new terms, the Fed will borrow up to $37.8 billion in fixed-income securities from AIG and provide AIG life insurance subsidiaries cash collateral to help them manage their securities lending business, the Times reported.
Clarifying first, second and fourth paragraphs that Allstate didn't say it was making moves to raise capital.
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