Lincoln National Corp. has issued $950 million in preferred shares under the U.S. Treasury Department's Capital Purchase Program, which the U.S. life insurer said completes its plan to raise $2.1 billion.

The capital-raising plan was comprised of a mix of common equity, debt and preferred shares, and included $690 million of common stock and $500 million of senior notes in the private markets, Lincoln said.

Lincoln also said it contributed $1 billion to its main, Indiana-based insurance subsidiary, Lincoln National Life Insurance Co.

Last month, Lincoln said the holding company would keep the remaining $1 billion for general corporate purposes, including repaying short-term debt and investing in its core businesses (BestWire, June 15, 2009).

The company saw strong demand for its common stock and debt offerings, and "the ratings agencies have recognized the significant benefits of our capital plan," said Dennis R. Glass, president and chief executive officer of Lincoln (NYSE: LNC), in a statement.

The CPP, part of the $700 billion Troubled Asset Relief Program, allows eligible institutions to sell preferred shares, along with warrants for common shares, to the Treasury, which pays 5% annual dividends for the first five years. The program requires that only federally regulated, U.S.-controlled banks, savings associations and savings and loans can participate (BestWire, April 21, 2009).

Lincoln had already received approval from the federal Office of Thrift Supervision for a savings and loan purchase and a holding company conversion.

The company was among a list of major insurance companies receiving preliminary approval in May for the bailout money, though others have since chosen not to take it. Lincoln received preliminary approval for $2.5 billion.

Hartford Financial Services Group Inc. (NYSE: HIG) has accepted all of the $3.4 billion approved from the TARP (BestWire, June 29, 2009).

U.S. life insurers' profits have been battered by big investment losses in their portfolios tied to the global credit crisis and the sharp declines and volatility in the stock markets.

For full-year 2008, Lincoln's net income plummeted 95% to $56.8 million, while it reported a first-quarter 2009 net loss of $579 million on a goodwill charge on the variable annuity business it acquired from Jefferson-Pilot Corp. (BestWire, May 6, 2009).

On the early afternoon of July 13, Lincoln's stock was trading at $15.06 a share, up 3.15% from the previous close.

Lincoln National Life Insurance Co. currently has a Best's Financial Strength Rating of A+ (Superior).

(By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)gy