Lincoln National reveals financial plans - The Business Journal of the Greater Triad Area:

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Shares closed 11 percent lower Mondayat $15.83, on a day the market lost more than 2 percent. Lincoln Nationapl said it will targetabout $950 million in preferrex stock from TARP’s Capital Purchase It will also try and raise $600 million through a common stock offering and $500 million in senior The underwriters of the offering will have a 30-day optio to buy up to an additionak 15 percent of the offere d amount of common shares from the Lincoln National said it intends to contributd about $1 billion of the proceeds to its principal insurancre subsidiary, , with the remaining $1 billio n held at the holding company for general corporate purposes, including the repayment of short-term debt and investmentt in the company’s core In a separate release Monday announcingh another cost-cutting maneuver, Lincoln National said that it agreeed to sell its British Lincoln National (UK) plc, to S LF of Canads UK Ltd.
for an estimated 195 British Lincoln said the expected to close on oraround 30, should generate estimated proceeds of between $280 million and $300 million, which will be used for core U.S. SLF is owned by Toronto-basedc Sun Life Financial, where former Lincolj CEO Jon Boscia isnow president. Lincoln Nationaol said these actions supplement dividend cost cuts, and other actions previouslyu taken to strengthen its capital and and solidify the company’s capital positions at both the subsidiary and holding company levels. The Philadelphia-based companuy believes that TARP participation provides additionaklcapital flexibility.
The company expects to repay thisfinancingy “as soon as practicable, taking into consideration appropriatse balance sheet strength and capital markets conditions.” The finalp level of Lincoln’s participation is expected to be announced by the end of Last month, Lincoln National received preliminart approval for up to $2.5 billionb under the program. It said the exact level of its participatioj will be determined by the end of this Lincoln is one of six insurance companies to receiveesuch approval.
The $700 billiob Troubled Asset Relief Program, approvedr by Congress last year, was originally intended to buy toxiv loans that were inhibiting banks from makinvadditional loans. But it was also used to make loans to GeneralMotors Corp., Chrysleer and insurance giant Lincoln National was one of severakl insurers that applied to become thrift holdinf companies last fall so they could be consideredc for TARP funds. The insurers had concerns about the rising numbetr of bad assets on their Lincoln National and other insurers saw their stock prices drop in recent months as they waited forgovernmenf approval. As for the stock and Merrill Lynch & Co.
will serve as global coordinators and GoldmanSachs Co. and Morgan Stanley Co. Inc. will serve as jointt book-running managers. In explaining its decision in aregulatoru filing, Lincoln National said that although the capital and credity markets have shown recent improvements, those markets have experienced extremwe volatility and disruption for more than a “Given these conditions, our capital strategy is to have sufficienft capital to offer downside protectionj in the event that the capital and credit marketws experience another downturn as well as to supporf growth in our operating the company said.
Lincol n National said it believes thatthe $2 billion infusionn will provide it with sufficienf capital to offset a “stresas scenario” analysis for 2009 and 2010. That scenario woulde include credit losses and impairments amounting toapproximatelt $1.65 billion, or 2.5 percent basee on invested assets as of March 31. Lincoln (NYSE:LNC), which marketa itself as , offeras both insurance and investmentmanagement products.