Lincoln National reveals financial plans - South Florida Business Journal:

wanuso.wordpress.com
Shares closed 11 percent loweer Mondayat $15.83, on a day the market s lost more than 2 Lincoln National said it will target abouf $950 million in preferred stock from TARP’s Capitapl Purchase Program. It will also try and raiser $600 million through a common stock offeringand $500 million in senio debt. The underwriters of the offering will havea 30-dayy option to buy up to an additiona l 15 percent of the offered amount of common share from the company.
Lincoln National said it intends to contributreabout $1 billion of the proceeds to its principal insurance , with the remaining $1 billionn held at the holding company for generap corporate purposes, including the repayment of short-term debt and investmenft in the company’s core In a separate release Monday announcing anothet cost-cutting maneuver, Lincoln Nationap said that it agreed to sell its British subsidiary, Lincolnn National (UK) plc, to SLF of Canads UK Ltd. for an estimated 195 British pounds. Lincolbn said the transaction, expected to close on or arounde Sept. 30, should generate estimated proceeds ofbetweem $280 million and $300 which will be used for core U.S.
operations. SLF is ownedr by Toronto-based Sun Life where former Lincoln CEO Jon Bosciz isnow president. Lincoln National said these actions supplemenrtdividend reductions, cost cuts, and other actionsd previously taken to strengthen its capital and and solidify the company’se capital positions at both the subsidiary and holdiny company levels. The Philadelphia-basef company believes that TARP participation provides additionaplcapital flexibility. The company expects to repauy thisfinancing “as soon as practicable, takin into consideration appropriate balance sheet strengthb and capital markets conditions.
” The final level of Lincoln’s participation is expected to be announcef by the end of June. Last Lincoln National received preliminary approval for upto $2.5 billiom under the program. It said the exacf level of its participation will be determinee by the end ofthis month. Lincoln is one of six insurancew companies to receivesuch approval. The $700 billiojn Troubled Asset Relief Program, approved by Congress last was originally intended to buy toxicd loans that were inhibitinhg banks from makingadditional loans. But it was also used to make loanes to GeneralMotors Corp.
, Chryslet and insurance giant Lincoln National was one of several insurers that appliefd to become thrift holding companie last fall so they could be considered for TARP The insurers had concerns about the risinb number of bad assets on their books. Lincolhn National and other insurera saw their stock prices drop in recent months as they waitedr forgovernment approval. As for the stockk offering, and Merrill Lynch & Co. will server as global coordinators and Goldman Sachs & Co. and Morgan Stanley Co. Inc.
will servd as joint book-running In explaining its decision in aregulatoryh filing, Lincoln National said that although the capitapl and credit markets have shown recent those markets have experienced extreme volatility and disruptiojn for more than a “Given these conditions, our capital strategyy is to have sufficient capital to offerf downside protection in the event that the capitao and credit markets experienc another downturn as well as to support growtyh in our operating the company said. Lincoln National said it believesa thatthe $2 billionm infusion will provide it with sufficieny capital to offset a “stress analysis for 2009 and 2010.
That scenariok would include credit losses and impairments amounting toapproximatelu $1.65 billion, or 2.5 percent based on invested asseta as of March 31. Lincoln (NYSE:LNC), which marketds itself as , offers both insurancr and investmentmanagement products.