Lincoln Financial prices capped tender offer for 8.75%, 6.15% notes

By Susanna Moon

Chicago, Dec. 20 – Lincoln Financial Group priced the tender offers for its $487,056,000 of 8.75% senior notes due 2019 and its $498 million of 6.15% senior notes due 2036.

The total purchase price per $1,000 principal amount was set at $1,162.15 for the 8.75% notes and $1,176.08 for the 6.15% senior notes, according to a company notice.

Pricing was set at 2 p.m. ET on Dec. 19 using a reference security and a spread as follows:

• For the 8.75% notes, the reference yield was 1.533% using the 1% Treasury due Nov. 15, 2019 plus a spread of 60 basis points; and

• For the 6.15% notes, the reference yield was 3.146% based on the 2.25% Treasury due Aug. 15, 2046 plus 160 bps.

The total amount includes an early tender premium of $30.00 per $1,000 principal amount that will only be paid to those who tendered by the early deadline.

Lincoln Financial will also pay accrued interest up to but excluding the settlement date, which is expected to be Dec. 20 for early tenders.

The company said on Dec. 5 that it was tendering for up to $175 million of the 8.75% notes and up to $150 million of the 6.15% notes.

Investors had tendered $288,987,000 of the 8.75% notes and $160,725,000 of the 6.15% notes as of 5 p.m. ET on Dec. 16, the early tender date.

Lincoln raised the tender cap for the 8.75% notes to $200 million on Monday and said it will accept for purchase the 8.75% notes using a proration factor of 69.21% and the 6.15% notes using a proration factor of 93.33%.

The tender was set to continue until 11:59 p.m. ET on Jan. 3. The offer has been oversubscribed as of the early deadline, however, and the company said it does not expect to accept for purchase any notes tendered after the early deadline.

Completion of the offer is subject a financing condition.

Wells Fargo Securities LLC (704 410-4760 or 866 309-6316), BofA Merrill Lynch (980 387-3907 or 888 292-0070) and Citigroup Global Markets, Inc. (212 723-6106 or 800 558-3745) are dealer managers. Global Bondholder Services Corp. (866 470-3900 or 212 430-3774) is information agent and tender agent.

Lincoln Financial is a Radnor, Pa., provider of retirement and insurance services.

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