Insurer makes huge investment to save troubled company.
Allianz SE has invested $2.5bn in US insurer The Hartford Financial Services Group.
The Hartford will sell $750m of preferred shares to Allianz at $31 per share, and $1.75bn of junior subordinated debt.
It follows recent difficulties over its cashflow as well as fears overits exposure to troubled companies, including AIG.
Allianz will also receive warrants which entitle it to purchase $1.75bn of common stock at an exercise price of $25.32 per share, subject to shareholder approvals. The warrants will expire in seven years.
In its third quarter results, The Hartford said that its expects a net third quarter loss of $8.50-8.80 per share, including net capital losses of $2.1-2.2bn.
