Lincoln Financial announces exchange, consent solicitation results

Chicago, Aug. 10 – Lincoln Financial Group announced the results of its exchange offers for two series of capital securities, according to a news release on Tuesday.

The company was offering to exchange the $722,527,000 of 7% capital securities due 2066 (Cusip: 534187AS8) and the $490.71 million of 6.05% capital securities due 2067 (Cusip: 534187AU3) for a like principal amount of floating-rate subordinated notes with the same maturities as the existing notes.

As of the 5 p.m. ET Aug. 9 deadline, Lincoln Financial received tenders for $562,034,000, or 77.79%, of the 2066 securities and $432,743,000, or 88.19%, of the 2067 securities.

The company said it was conducting the exchange offers to give existing holders of capital securities the opportunity to exchange their capital securities for higher-ranking securities. The subordinated notes will rank senior to the capital securities. In the event of an insolvency, funds will first be paid to holders of the subordinated notes, then to holders of capital securities.

The company may also issue additional notes that rank on a parity with the subordinated notes or that are otherwise senior to the capital securities. The subordinated notes will also contain benchmark transition provisions that will allow Lincoln Financial to determine the interest rate payable based on a new reference rate in the event that Libor is unavailable.

Interest on the capital securities is payable in arrears until maturity on a quarterly basis at an annual rate based on Libor plus the applicable margin, which is 235.75 basis points for the 2066 securities and 204 bps for the 2067 securities. The subordinated notes will be based on the same margin.

In connection with the exchange offers, the company was also soliciting consents from holders to amend the indentures governing the capital securities to eliminate various terms and conditions and other provisions.

Completion of the consent solicitations is intended to remove some terms and conditions from the capital securities that have not been included in other recent public offerings of subordinated debt securities by issuers in similar industries.

The offer was conditioned upon the receipt of consents from a majority of noteholders. The condition was met.

The exchange offers and consent solicitations expired at 5 p.m. ET on Aug. 9.

Settlement is planned for Aug. 11.

Credit Suisse Securities (USA) LLC (800 820-1653, 212 538-2147 or americas.lm@credit-suisse.com) and HSBC Securities (USA) LLC (866 811-8049, 212 525-5552 or lmamericas@us.hsbc.com) are the dealer managers.

Global Bondholder Services Corp. (866-924-2200, 212 430-3774 or contact@gbsc-usa.com) is exchange agent and tender agent.

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

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