Monday, June 15, 2009

Insurers LNC and HIG Dragging the Financials Lower; Just as POTC predicted on May 21st

Lincoln National Corp. (LNC) said Monday it is aiming to raise $2.1 billion in capital, including a $600 million common stock offering, as part of its broader program to bolster capital levels and reduce debt. The insurance holding company also announced plans Monday to sell $500 million in senior debt and $950 million in preferred stock under the Treasury's Capital Purchase Program. The parent of Lincoln Financial has a common stock value of about $4.5 billion. Shares fell Friday after fellow life insurer Hartford Financial Services Group Inc. (HIG) announced a $750 million stock offering as it plans to tap money from the Treasury program. Lincoln has also been approved to receive money, while other cleared life insurers have declined the funds. Lincoln National in May received preliminary approval for up to $2.5 billion under the government rescue program. It also is one of the latest to take advantage of a resurgence in capital markets. It plans to use $1 billion of the raised funds to bolster capital at its life insurance unit. The company swung to a first-quarter loss last month. In addition to the capital raising it also has been cutting costs and slashed its dividend by 95% to stave off a liquidity crunch after steep stock-market declines spurred investment losses. Standard & Poor's Ratings Services recently cut Lincoln National's credit ratings, saying the company's cash needs have spiked in the first half of 2009 on maturing short-term debt. Lincoln National closed Friday at $17.75 per share and didn't trade premarket. -By Tess Stynes, Dow Jones Newswires; 201-938-2473; Order free Annual Report for Lincoln National Corp. Visit or call 1-888-301-0513 Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires June 15, 2009 06:54 ET (10:54 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 06 54 AM EDT 06-15-09

1 comment:

Anonymous said...

Congrats right back. Stellar record you guys have. The "Tug of War" piece is still my favorite though. Money is not an issue.
Buy Africa and Gold if Obama wins, priceless!