Wednesday, April 8, 2009

A Troubled Sector Rallies on Gov't Bailout Program; Desperate News Related Rallies Require Aggressive Traders to Short HIG, LNC and PRU

WASHINGTON (Dow Jones)--The U.S. Treasury Department on Wednesday confirmed that a number of life insurance companies could receive bailout funds under a program it created last fall to inject taxpayer funds into the ailing financial sector. "There are a number of life insurers who meet the requirements for the Capital Purchase Program because of their thrift or bank holding company status," said Treasury spokesman Andrew Williams. "These companies applied within appropriate deadlines. These are among the hundreds of financial institutions in the CPP pipeline that will be reviewed and funded as appropriate on a rolling basis." Treasury projects that only a small number of life insurance firms are likely to qualify for Treasury's Capital Purchase Program, a signature program designed to inject hundreds of billions of dollars into financial firms. According to The Wall Street Journal, companies such as Hartford Financial Services Group Inc., Genworth Financial Inc. and Lincoln National Corp., struck deals last autumn to buy regulated savings and loans so that they could qualify for the funds. Hartford and Lincoln have applied for funds under Treasury's Troubled Asset Relief Program. Genworth said it has applied with the office of Thrift Supervision to approve its thrift purchase as a step toward gaining access to federal funds. Meanwhile, Prudential Financial Inc. has also applied for the funds, The Wall Street Journal reported. Additionally, the Journal reported that MetLife Inc., the biggest publicly traded insurer by assets, hasn't commented on whether it has applied for TARP money. A Treasury official said the department still projects the CPP to be a $218 billion program. The Treasury said Tuesday that $198.8 billion has been spent, leaving little more than $19 billion left. That money will need to be split among not only the life insurers, but the hundreds of banks that have already filed applications to receive capital injections from the program. -By Maya Jackson Randall, Dow Jones Newswires; 202-862-9255, (Michael Crittenden contributed to this report.) Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires April 08, 2009 10:51 ET (14:51 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 10 51 AM EDT 04-08-09

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