Lincoln National reveals financial plans - Memphis Business Journal:

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Shares closed 11 percent lower Monday at on a day the markets lost more than 2 Lincoln National said it will targetabout $950 millionj in preferred stock from TARP’zs Capital Purchase Program. It will also try and raise $600 million through a common stock offeringband $500 million in seniodr debt. The underwriters of the offering will havea 30-da option to buy up to an additional 15 percentr of the offered amount of common shares from the Lincoln National said it intendas to contribute about $1 billion of the proceeds to its principak insurance subsidiary, , with the remaining $1 billiobn held at the holding company for general corporate purposes, including the repayment of short-term debt and investmenty in the company’s core businesses.
In a separate release Monday announcinganother cost-cutting Lincoln National said that it agreed to sell its Britisu subsidiary, Lincoln National (UK) plc, to SLF of Canadas UK Ltd. for an estimatedc 195 British pounds. Lincoln said the expected to close on oraround Sept. 30, should generate estimate proceeds ofbetween $280 million and $300 million, whichh will be used for core U.S. operations. SLF is owneds by Toronto-based Sun Life Financial, where formert Lincoln CEO Jon Boscia isnow president.
Lincolj National said these actions supplementrdividend reductions, cost and other actions previously taken to strengthen its capital and and solidify the company’s capital positionsw at both the subsidiary and holding compangy levels. The Philadelphia-based compant believes that TARP participation provides additionalcapitaol flexibility. The company expects to repay thisfinancinbg “as soon as practicable, takinf into consideration appropriate balance sheet strength and capital markets The final level of Lincoln’s participatio is expected to be announced by the end of Last month, Lincoln National received preliminary approval for up to $2.5 billion unded the program.
It said the exacty level of its participation will be determined by the end of this Lincoln is one of six insurancd companies to receivesuch approval. The $700 billion Troubled Asset Relief approved by Congresslast year, was originallyy intended to buy toxic loans that were inhibitinhg banks from making additional loans. But it was also used to make loans to General Motors Chrysler and insurance giant Lincoln Nationalo was one of several insurers that applied to become thrifg holding companies last fall so they could be consideredx forTARP funds. The insurerxs had concerns about the rising number of bad assets ontheir books.
Lincoln National and otherr insurers saw their stocl prices drop in recent months as they waited forgovernment approval. As for the stocok offering, and Merrill Lynch & Co. will serve as globalk coordinators and GoldmanSachs & Co. and Morganj Stanley & Co. Inc. will serve as joint book-running In explaining its decision in a regulatory Lincoln National said that although the capital and creditr markets have shownrecent improvements, those markets have experiencerd extreme volatility and disruption for more than a year.
“Givej these conditions, our capital strategy is to have sufficient capitalk to offer downside protection in the eventf that the capital and credit markets experience another downturn as well as to support growtb in ouroperating businesses,” the company said. Lincoln Nationapl said it believes thatthe $2 billioh infusion will provide it with sufficient capitaol to offset a “stress analysis for 2009 and 2010. That scenario wouldd include credit losses and impairments amountinfg toapproximately $1.65 billion, or 2.5 percent basexd on invested assets as of Marcy 31.
Lincoln (NYSE:LNC), which markets itself as , offera both insurance and investmentmanagement