Lincoln Financial Group prices stock and bond offerings


Wall Street was quite receptive to the stock and bond offerings to raise cash for Lincoln Financial Group to repay the US Treasury and exit the TARP program. The insurance/radio (the latter being rather small) company easily raised $1.085 billion.

The offering of stock priced at $27.25. To hit the target of $335 million, the public offering was pegged at 12,293,578. However, the Wall Street firms handling the offering – JP Morgan, Credit Suisse, Morgan Stanley and Wells Fargo Securities – have a greenshoe of 1,844,037 shares to cover overallotments. If that it fully tapped it would add another $50.25 million to the stock sale.

The $750 million sale of new bonds was in two parts. An offering of $250 million of senior notes due 2015 carries a coupon of 4.3% and an offering of $500 million of senior notes due 2040 carries a 7% coupon. Those offerings were handled by JP Morgan, Bank of America Securities, Deutsche Bank Securities and US Bancorp Investments.

The stock and bond offerings are all expected to close on or about June 18th.

RBR-TVBR observation: These offerings don’t have any direct impact on Lincoln Financial Media, the radio group, except that they demonstrate the financial health of its parent company. The stock offering even priced above where the stock had been when it was announced. The proceeds from the stock offering, the 2015 notes and cash on hand will be used to buy back $950 million of preferred shares from Uncle Sam. The $500 million of 2040 notes will be used to build up universal life reserves of the company’s insurance subsidiaries.