Lincoln Financial to raise $2 bln in new capital

By @ibtimes on

Lincoln Financial Group said on Monday that it would accept federal bailout money as part of a plan to raise $2 billion that also includes sales of stock and debt.

The insurer said it planned to use proceeds to repay short-term debt and shore up its insurance subsidiary.

Lincoln said it would raise $950 million by selling preferred stock to the government.

The company is one of six big insurers that the government in May allowed to tap the Troubled Asset Relief Program.

Four of the insurers have declined to accept funds, while Hartford Financial Services Group Inc said on Friday that it would accept up to $3.4 billion.

Lincoln said it also planned to sell $600 million of common stock and may boost this offering by $90 million to meet demand. It also plans to sell up to $500 million of senior debt.

Lincoln said half of the new proceeds would go to fund the Lincoln National Life Insurance Co, while the remaining $1 billion would go for general corporate purposes, including the repayment of short-term debt and investment in the company's core businesses.

(Reporting by Juan Lagorio, editing by Lisa Von Ahn)

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