Financial maneuvering by Lincoln Financial Group


The insurance company parent of Lincoln Financial Media is reworking its balance sheet in a series of deals. Lincoln Financial Group is taking TARP funds from the US government, selling stock, selling bonds and selling a UK insurance company.

There’s a lot going on here, so first the stock offering. Lincoln Financial Group said it will make a public underwritten offering of $600 million of its common shares. The stock sale will have JP Morgan Securities and Merrill Lynch as Global Coordinators and Goldman Sachs and Morgan Stanley as joint book-running managers. The underwriters will have access to a green shoe of an additional 15% of the offered amount for 30 days after the offering.

The common stock offering is a part of Lincoln’s broader capital plan that also includes raising up to $500 million in senior debt and targeting approximately $950 million in preferred stock. Any preferred stock would be issued pursuant to the US Treasury’s Capital Purchase Program (CPP) under the Troubled Asset Relief Program (TARP) legislation.

Lincoln said it currently intends to contribute approximately $1 billion of the proceeds to its principal insurance subsidiary, The Lincoln National Life Insurance Company, with the remaining $1 billion held at the holding company for general corporate purposes, including the repayment of short-term debt and investment in the company’s core businesses.

Also yesterday (6/15) Lincoln Financial Group announced the sale of its Lincoln National (UK) subsidiary for 195 million pounds ($317.2 million) to SLF of Canada UK Limited. The unit primarily sells life insurance and retirement income products in the UK. Lincoln said the sale will shift capital to its core US operations.

The financial maneuvers were well received by Standard & Poor’s, which revised its outlook for Lincoln and its insurance operations from “negative” to “stable.”

RBR/TVBR observation: As far as we can tell, this is the only broadcast station owner eligible for TARP, other than General Electric, whose GE Capital has declined to take TARP funds. More importantly, we hope that some of the banks and insurance companies who are participating in the TARP program to boost their balance sheets will resume making loans to broadcasters!