Lincoln Financial Group, which has major operations in Hartford, said today it will make a full $500 million debt payment on time and out of its wallet.
The Philadelphia-based insurer said the repayment due Monday will come from internal cash sources, even though Lincoln has an untapped $1 billion line of credit and is seeking federal financial assistance.
Lincoln Financial CEO Dennis Glass reiterated the company’s financial flexibility to meet its obligations despite the pressures bearing down on insurers, banks and other financial services companies.
“Lincoln has recently taken a number of steps to bolster its capital and liquidity positions in these difficult markets …,” Glass said. “We have additional securitization and reinsurance options and are also very fortunate to have a number of valuable assets that could be monetized to raise additional capital should the need arise.”
The liquidity reassurances helped the company’s stock partially rebound in mid-morning trading from Monday’s drubbing.
At 11 a.m., Lincoln traded at $7.51, up $1.10, or 17.2 percent.
Lincoln also says it has the ability to issue commercial paper, $375 million of which is outstanding under the Federal Reserve Board’s commercial paper funding facility.
The company says it has since withdrawn its application to the Federal Deposit Insurance Corp. to become a savings and loan holding company, to qualify for federal assistance under the Temporary Liquidity Guarantee Program. Lincoln admits the application was a long shot, but said it may refile if eligibility guidelines are broadened.
However, Lincoln said its application remains pending to participate in the Treasury Department’s Troubled Asset Relief Program (TARP).
