The parent company of radio owner Lincoln Financial Media took a drubbing on Wall Street, with its shares losing more than a third of their value Monday. Of course, it had nothing to do with the radio stations. The insurance company said it would not be able to qualify for a federal government bailout, leading a major brokerage to downgrade the stock.
Lincoln National Corporation, which primarily uses the name Lincoln Financial Group, bought a small savings & loan a few months back and applied for the FDIC’s Temporary Liquidity Guarantee Program (TLGP). But the application has not been acted on and Lincoln last week withdrew its application because it appears the company does not currently qualify for TLGP. Lincoln said it may reapply if the rules change or if it qualifies for another government program.
Without any access to a federal bailout, Credit Suisse cut Lincoln National’s stock from outperform to neutral. The stock was Monday’s worst performer on the New York Stock Exchange, plunging 38.2% to close at $6.41. The 52-week high for the stock was $59.99.
That was in spite of a bit of good news for Lincoln Financial Group, which announced a deal to have Commonwealth Annuity and Life Insurance Company reinsure about $1.5 billion of its estimated reserves. That will create $240 million in statutory capital relief for Lincoln’s insurance business.