CNA Suspends Dividend, Raises Capital

CNA Financial(CNA Quote), the 13th largest property and casualty insurance company in the U.S., announced Monday that it has suspended its quarterly dividend as part of an arrangement with its holding company Loews(L Quote)

Loews will purchase $1.25 billion of nonvoting cumulative senior preferred stock issued by CNA which, per the agreement, must be paid off before CNA can resume paying quarterly dividends on its common stock.

One billion dollars of the proceeds will be used to increase statutory capital of the largest insurance subsidiary, Continental Casualty. The positive spin put on the capital-raise during the conference call was that it was a proactive move to take advantage of new opportunities. However, Continental Casualty reported a quarter-over-quarter decline in capital of $684 million as of June 30, the most recent statutory data available. ...