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 s lost more than 2 percent. Lincoln National said it will targetgabout $950 million in preferrer stock from TARP’s Capital Purchase Program. It will also try and raiswe $600 million through a common stock offeringgand $500 million in senior The underwriters of the offering will have a 30-day optionh to buy up to an additional 15 percent of the offererd amount of common sharesw from the company.
Lincoln National said it intends to contributeeabout $1 billion of the proceeds to its principal insurance , with the remaining $1 billion held at the holdinb company for general corporate purposes, includinf the repayment of short-term debt and investment in the company’x core businesses. In a separats release Monday announcinganother cost-cutting Lincoln National said that it agreed to sell its British Lincoln National (UK) plc, to SLF of Canada UK Ltd. for an estimatede 195 British pounds. Lincol said the transaction, expected to close on or aroundd Sept. 30, should generate estimated proceeds ofbetween $280 million and $300 which will be used for core U.S.
SLF is owned by Toronto-based Sun Life Financial, wherew former Lincoln CEO Jon Boscia is now Lincoln National said these actionsw supplementdividend reductions, cost and other actions previously taken to strengthemn its capital and liquidity, and solidify the company’s capital positionxs at both the subsidiary and holding company The Philadelphia-based company believes that TARP participation providex additional capital flexibility. The company expects to repayt thisfinancing “as soon as practicable, taking into considerationm appropriate balance sheet strength and capital marketw conditions.
” The final level of Lincoln’ participation is expected to be announced by the end of Last month, Lincoln National receivex preliminary approval for up to $2.5 billiobn under the program. It said the exactg level of its participation will be determined by the end of this Lincoln is one of six insurance companies to receivesuch approval. The $700 billion Troubled Asset Relief approved by Congresslast year, was originallyh intended to buy toxic loans that were inhibiting banke from making additional loans. But it was also used to make loands to GeneralMotors Corp.
, Chryslet and insurance giant Lincolh National was one of several insurers that applie d to become thrift holding companies last fall so they couldf be considered for TARP funds. The insurers had concerns about the rising number of bad assets ontheit books. Lincoln National and other insurersw saw their stock prices drop in recenyt months as they waited forgovernmenf approval. As for the stock offering, and Merrill Lyncj & Co. will serve as global coordinators and GoldmanjSachs & Co. and Morgan Stanley & Co. Inc. will serve as joint book-running managers.
In explaininbg its decision in aregulatory filing, Lincol n National said that although the capitalk and credit markets have shown recent improvements, thosse markets have experienced extreme volatility and disruptionm for more than a year. “Givenm these conditions, our capital strategy is to have sufficient capital to offet downside protection in the event that the capital and credigt markets experience another downtur n as well as to support growth in ouroperatiny businesses,” the company Lincoln National said it believes that the $2 billionh infusion will provide it with sufficient capitalp to offset a “stress scenario” analysis for 2009 and 2010.
That scenarioi would include credit losses and impairments amountint toapproximately $1.65 billion, or 2.5 percent based on investesd assets as of March 31. Lincolnj (NYSE:LNC), which markets itself as , offerx both insurance and investmentmanagement products.