The Hartford 2008 Annual Report Download - page 283

Table of Contents
Commercial Mortgage Loans
The Company has observed weakness in commercial real estate market fundamentals and expects continued pressure on
these fundamentals including increased vacancies, rising delinquencies, lower rent growth and declining property values.
The following tables represent the Company’s exposure to CMBS bonds, commercial real estate CDOs, and IOs by current
credit quality and vintage year. A comparison of fair value to amortized cost is not indicative of the pricing of individual
securities as rating downgrades and impairments have occurred. Credit protection represents the current weighted average
percentage of the outstanding capital structure subordinated to the Company’s investment holding that is available to absorb
losses before the security incurs the first dollar loss of principal. This credit protection does not include any equity interest or
property value in excess of outstanding debt.
CMBS — Bonds [1]
December 31, 2008
AAA AA A BBB BB and Below Total
Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value Cost Value Cost Value Cost Value
2003 & Prior $ 2,057 $ 1,869 $ 455 $ 299 $ 175 $ 102 $ 36 $ 27 $ 37 $ 25 $ 2,760 $ 2,322
2004 667 576 85 35 65 22 23 10 — — 840 643
2005 1,142 847 475 152 325 127 55 27 — — 1,997 1,153
2006 2,562 1,498 385 110 469 168 385 140 40 12 3,841 1,928
2007 981 504 438 128 148 45 134 60 5 1 1,706 738
Total $ 7,409 $ 5,294 $ 1,838 $ 724 $ 1,182 $ 464 $ 633 $ 264 $ 82 $ 38 $ 11,144 $ 6,784
Credit
protection 24.4% 16.4% 12.2% 5.3% 4.4% 20.6%
December 31, 2007
AAA AA A BBB BB and Below Total
Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value Cost Value Cost Value Cost Value
2003 & Prior $ 2,666 $ 2,702 $ 495 $ 502 $ 224 $ 227 $ 30 $ 32 $ 46 $ 49 $ 3,461 $ 3,512
2004 709 708 89 87 77 73 23 21 — — 898 889
2005 1,280 1,258 479 454 345 327 85 76 24 21 2,213 2,136
2006 2,975 2,910 415 395 555 526 456 400 24 22 4,425 4,253
2007 1,365 1,342 461 431 180 160 190 165 3 3 2,199 2,101
Total $ 8,995 $ 8,920 $ 1,939 $ 1,869 $ 1,381 $ 1,313 $ 784 $ 694 $ 97 $ 95 $ 13,196 $ 12,891
Credit
protection 23.8% 16.4% 13.6% 6.8% 3.7% 20.6%
[1] The vintage year represents the year the pool of loans was originated.
CMBS — CRE CDOs [1] [2] [3]
December 31, 2008 [4]
AAA AA A BBB BB and Below Total
Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value Cost Value Cost Value Cost Value
2003 & Prior $ 180 $ 59 $ 96 $ 29 $ 79 $ 17 $ 64 $ 7 $ 31 $ 7 $ 450 $ 119
2004 129 38 17 6 31 9 11 2 14 3 202 58
2005 94 37 62 15 65 12 10 2 1 — 232 66
2006 242 76 91 25 81 20 15 2 — — 429 123
2007 139 45 106 19 101 11 12 1 — — 358 76
2008 43 13 22 5 24 3 3 — — — 92 21
Total $ 827 $ 268 $ 394 $ 99 $ 381 $ 72 $ 115 $ 14 $ 46 $ 10 $ 1,763 $ 463
Credit
protection 29.7% 21.3% 18.2% 19.4% 57.0% 25.4%
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009