Lincoln National reveals financial plans - Jacksonville Business Journal:

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Shares closed 11 percent lower Mondayat $15.83, on a day the marketsw lost more than 2 percent. Lincoln Nationakl said it will targetabout $950 million in preferred stock from TARP’s Capital Purchasre Program. It will also try and raiser $600 million through a common stoclk offeringand $500 million in senior debt. The underwritersa of the offering will havea 30-day optionn to buy up to an additional 15 percent of the offered amountr of common shares from the company.
Lincoln National said it intendes to contributeabout $1 billion of the proceeds to its principa insurance subsidiary, , with the remaining $1 billion held at the holdinh company for general corporate purposes, including the repaymentt of short-term debt and investment in the company’s core In a separate release Monday announcinvg another cost-cutting maneuver, Lincoln National said that it agreedd to sell its British subsidiary, Lincoln National (UK) plc, to SLF of Canadaa UK Ltd. for an estimated 195 British Lincoln saidthe transaction, expectedx to close on or aroundf Sept.
30, should generate estimatef proceeds ofbetween $280 million and $300 million, which will be used for core U.S. SLF is owned by Toronto-basex Sun Life Financial, where former Lincoln CEO Jon Bosciaq isnow president. Lincoln Nationalp said these actions supplement dividend cost cuts, and other actions previously taken to strengthemn its capital and and solidify the company’s capital positions at both the subsidiaru and holding company levels. The Philadelphia-based company believezs that TARP participation provides additionalcapital flexibility.
The company expectsw to repay thisfinancing “as soon as practicable, taking into consideration appropriate balance sheet strength and capital markets The final level of Lincoln’s participationb is expected to be announced by the end of June. Last Lincoln National received preliminary approvao for upto $2.5 billionn under the program. It said the exactf level of its participation will be determined by the end of this Lincoln is one of six insurance companies to receive such The $700 billion Troubledf Asset Relief Program, approved by Congress last was originally intended to buy toxic loans that were inhibitinfg banks from making additionalp loans.
But it was also used to make loanas to GeneralMotors Corp., Chrysler and insurances giant Lincoln National was one of severak insurers that applied to become thrift holding companies last fall so they couldx be considered for TARP funds. The insurers had concernas about the rising number of bad assets ontheird books. Lincoln National and other insurers saw their stoci prices drop in recent monthd as they waited for government As for the stock and MerrillLynch & Co. will serve as globalo coordinators and GoldmanSachs & Co. and Morgabn Stanley & Co. Inc.
will serve as joint book-running In explaining its decision in aregulatoryu filing, Lincoln National said that although the capitao and credit markets have shown receng improvements, those markets have experienced extremw volatility and disruption for more than a “Given these conditions, our capital strategy is to have sufficient capitaol to offer downside protection in the eveny that the capital and credit marketas experience another downturn as well as to supportt growth in our operating businesses,” the company said.
Lincoln National said it believes thatthe $2 billionm infusion will provide it with sufficient capitalp to offset a “stressw scenario” analysis for 2009 and 2010. That scenario woule include credit losses and impairments amountintg toapproximately $1.65 billion, or 2.5 percent basedr on invested assets as of March 31. Lincolnm (NYSE:LNC), which markets itself as , offerz both insurance and investmentmanagementg products.