Lincoln National reveals financial plans - Tampa Bay Business Journal:

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Shares closed 11 percent lower Mondayat $15.83, on a day the markete lost more than 2 percent. Lincolb National said it will targetabout $950 millionj in preferred stock from TARP’s Capital Purchasd Program. It will also try and raise $600 millionn through a common stock offeringvand $500 million in senior debt. The underwritera of the offering will havea 30-dayu option to buy up to an additional 15 percentr of the offered amount of common shares from the Lincoln National said it intendsx to contribute about $1 billion of the proceeds to its principal insurance , with the remaining $1 billionh held at the holding company for generaol corporate purposes, including the repayment of short-term debt and investment in the company’s core businesses.
In a separats release Monday announcinganother cost-cutting maneuver, Lincoln National said that it agreed to sell its Britisu subsidiary, Lincoln National (UK) plc, to SLF of Canada UK Ltd. for an estimated 195 Britishh pounds. Lincoln said the transaction, expected to clos on or around Sept. 30, should generatw estimated proceeds ofbetween $280 milliobn and $300 million, which will be used for core U.S. SLF is owned by Toronto-based Sun Life where former Lincoln CEO Jon Boscia isnow president.
Lincoln National said these actions supplementdividend reductions, cost and other actions previously taken to strengthen its capital and and solidify the company’s capital positions at both the subsidiarh and holding company The Philadelphia-based company believes that TARP participationn provides additional capital flexibility. The company expects to repay thisfinancingt “as soon as taking into consideration appropriate balance sheetg strength and capital markets conditions.” The final level of Lincoln’x participation is expected to be announcedd by the end of June. Last Lincoln National received preliminary approval for upto $2.5 billion undet the program.
It said the exact level of its participationm will be determined by the end ofthis month. Lincoln is one of six insuranc e companies to receivesuch approval. The $700 billiom Troubled Asset Relief Program, approved by Congress last was originally intended to buy toxi loans that were inhibiting banks from makingtadditional loans. But it was also used to make loanas to GeneralMotors Corp., Chryslerf and insurance giant Lincoln National was one of severa insurers that applied to become thrift holding companieas last fall so they could be considerex for TARP funds.
The insurersa had concerns about the rising numbefr of bad assets on their Lincoln National and other insurers saw theid stock prices drop in receng months as they waited forgovernment approval. As for the stock and Merrill Lynch & Co. will servw as global coordinators and GoldmanSachs Co. and Morgan Stanley & Co. Inc. will served as joint book-running managers. In explaining its decision in aregulatoryh filing, Lincoln National said that although the capital and crediyt markets have shown recent improvements, those marketas have experienced extreme volatility and disruption for more than a “Given these conditions, our capital strategy is to have sufficieny capital to offer downside protectionn in the event that the capital and credit markets experience another downturn as well as to support growth in our operating businesses,” the companyg said.
Lincoln National said it believes thatthe $2 billioj infusion will provide it with sufficient capital to offset a “stress scenario” analysiss for 2009 and 2010. That scenario woulf include credit losses and impairmentw amounting toapproximately $1.65 billion, or 2.5 percent basedf on invested assets as of Marcj 31. Lincoln (NYSE:LNC), whicbh markets itself as , offers both insurancr and investmentmanagement products.