Lincoln To Repay TARP

After the transactions are completed, the Treasury Department will have warrants to buy about 13 million Lincoln shares at an exercise price of $10.92 per share, and Lincoln has no plans to buy back the warrants, Lincoln says.

“We appreciate the critical role the government and the American taxpayers have played in stabilizing the financial markets and we are pleased to announce a plan to repurchase Treasury’s investment sooner than originally anticipated,” Lincoln President Dennis Glass says in a statement. “Lincoln Financial always viewed this investment as temporary capital and intended to return it as soon as it was prudent.”

Standard & Poor’s Ratings Services, New York, responded to the announcement by affirming its ratings on Lincoln and its subsidiaries and keeping its outlook on Lincoln at stable.

S&P says it raised the rating on Lincoln National Capital VI and the preliminary rating on Lincoln’s preferred stock to BBB from BBB minus to reflect its view that, “following the repayment of TARP CPP, a one-notch rating differentiation between the company’s subordinated debt and preferred stock is no longer warranted.”

After the completion of the offerings, “we believe LNC will maintain substantial excess cash in the near term, which supports strong financial flexibility and is available to further supplement the capital adequacy of its insurance operations,” S&P says.

Moody’s Investors Service, New York, earlier changed its outlook on Lincoln to stable, from negative.