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Source:	Associated Press
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PHILADELPHIA_Lincoln National Corp. said Tuesday it fully repaid a $500 million debt maturity and plans to repay $200 million in commercial paper as it matures over the coming weeks.

Lincoln National, which markets itself under the name Lincoln Financial Group, said it used dividends its subsidiaries paid the parent company to cover the recent debt payment and will use additional dividend payments to cover the remaining $200 million due.

The insurer received $400 million in dividend payments from Lincoln National Life Insurance Co. and $300 million in dividends from its principal reinsurance subsidiary.

The insurer's ability to repay its debt on time has provided some relief for investors concerned about Lincoln National's liquidity position.


Shares of Lincoln National rose 41 cents, or 6.4 percent, to $6.79 in late morning trading.

Life insurers have been hit hard in recent months by concerns about losses from variable annuities. Sharp declines in the market leading to investment losses have investors concerned that the insurers will have to tap reserves to help cover payments on the annuities. That would put added burden on insurers to raise capital during a time when obtaining new money is difficult.

After the $700 million in debt repayments, Lincoln National will have about $450 million in short-term debt still outstanding. The insurer said it plans to repay those debts through a combination of issuing new commercial paper and an inter-company borrowing facility of up to $1 billion. Lincoln National said it also has access to $1 billion in bank credit lines that currently have no funds drawn against them.

Commercial paper is short-term debt that firms often issued to help fund day-to-day operations.