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OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has assigned a debt rating of abbb+a to senior notes of $325 million due 2017, $800 million due 2022 and $425 million due 2042 to be issued by The Hartford Financial Services Group, Inc. (the Hartford) (Hartford, CT) (NYSE:HIG). A.M. Best has concurrently assigned a debt rating of abbb-a to $600 million fixed-to-floating rate junior subordinated debentures due 2042 (the junior debentures). All ratings are currently under review with developing implications. The under review status is consistent with the status of all other existing issuer credit ratings of the Hartford. All remaining ratings of the Hartford are unchanged.

"A.M. Bestas Ratings & the Treatment of Debt"

The 2017, 2022 and 2042 senior notes will bear interest at a fixed rate of 4.000%, 5.125% and 6.625%, respectively. The senior notes may be redeemed, in whole or in part, at any time.

The junior debentures will bear interest at a fixed rate of 7.875% through April 15, 2022, after which interest will be paid quarterly at a rate equal to the three-month LIBOR rate, reset quarterly, plus 5.596%. The junior debentures may be redeemed, in whole or in part, at any time after April 15, 2022 upon payment of the principal amount plus any accrued and unpaid interest to but not including the redemption date. Should they be redeemed in part, a minimum of $25 million aggregate principal amount must remain outstanding. In addition, prior to April 15, 2022, the junior debentures may be redeemed in whole, but not in part, upon the occurrence of certain events defined in the prospectus. Interest payments may be deferred on the junior debentures.

The proceeds from the sale of these notes and debentures are expected to be used to fund the Hartfordas repurchase of outstanding 10% fixed-to-floating rate junior subordinated debentures due 2068 (the 10% debentures) that were sold to Allianz SE (Allianz) in a private placement in October 2008. Under an agreement reached with Allianz dated March 30, 2012 (the Allianz agreement), the Hartford has received the right to repurchase these securities for $2.125 billion. Any proceeds not used for that purchase would be made available for general corporate purposes.

The acquisition of the 10% debentures is contingent on the receipt of consent of the holders of the Hartfordas 6.1% senior notes due 2041 (the 2041 notes) to the termination of a replacement capital covenant (RCC) entered into by the Hartford in favor of the holders of those notes. Such consent is being solicited from the holders of the 2041 notes concurrent with the offering of the newly-rated securities.

In addition, under the Allianz agreement, the Hartford will use approximately $300 million of the amount available under its current $500 million share repurchase authorization to reacquire outstanding Series B and C warrants (the warrants) from certain Allianz affiliates. Approximately $106 million will remain available for additional share repurchases under that authorization following this transaction.

Following the issuance of the senior debt and junior subordinated debentures and the acquisition of the warrants and the 10% debentures, the Hartfordas adjusted debt-to-capital ratio will be approximately 22%, which is fully supportive of the current rating level. Fixed charge coverage is expected to improve as a result of the reduced interest payments for the newly issued debt. These actions also result in a more laddered distribution of the Hartfordas future debt maturities, reducing the need to refinance a significant portion of the total debt in any single year.

The methodology used in determining these ratings is Bestas Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bestas rating process and contains the different rating criteria employed in

the rating process. Key criteria utilized include: aA.M. Bestas Ratings & the Treatment of Debta; aAnalyzing Commercial Paper Programsa; aRating Members of Insurance Groupsa and aEquity Credit for Hybrid Securities.a Bestas Credit Rating Methodology can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit [ www.ambest.com ].

Copyright 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.