Treasury nets $213M on Lincoln National TARP warrants

The TARP saved Lincoln Financial and other insurers from extinction.  You have achieved full payback plus warrants for their privilege of doing business with Taxpayers, Inc.  Lincoln is likely still insolvent if forced to value assets and liabilities at market value.

Excellent clip from David Faber on insurer bailouts at the bottom of the story.

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• From Reuters

(Reuters) - The U.S. Treasury Department said it expects to receive net proceeds of $213.7 million from the auction of stock warrants in insurance group Lincoln National Corp (nyse: LNC).

The Treasury sold about 13.05 million warrants at an auction price of $16.60 per warrant, well above the minimum bid price of $13.50.  The warrants, granted to the government last year as part of a now-repaid $950 million taxpayer bailout of the company, carry a strike price of $10.92 per share and expire July 10, 2019.

Lincoln National shares closed Thursday at $24.72 on the New York Stock Exchange.

Closing of the warrant sales was expected to occur on or about Sept. 22, the government said.

Lincoln National was one of three major insurance groups to receive bailout funds under the Troubled Asset Relief Program (TARP).  The funds have been paid back, and the Treasury stands to take in least $176.2 million more from the warrants auction at the minimum bid price, before selling expenses.

Thus far, the Treasury's total gross proceeds from warrant sales before selling costs, including private repurchase transactions and public auctions, now exceed $7 billion.

American International Group Inc (nyse: AIG) still owes about $49 billion in TARP funds it received as part of a massive bailout two years ago.

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And there's more:

• Treasury sells warrants in Hartford Financial

(Reuters) - The U.S. Treasury Department said on Monday it will auction 52.09 million warrants to purchase common stock in The Hartford Financial Services Group at a minimum bid price of $10.50 to divest its bailout investment in the insurer.

The Treasury said the modified Dutch auction will start at 8 a.m. (1200 GMT) on Tuesday and close at 6:30 p.m. (2230 GMT).

Hartford was one of three major insurance groups to receive bailout funds from the Troubled Asset Relief Fund during the financial crisis. It issued the warrants to Treasury in exchange for a preferred stock investment.

Treasury said the Hartford warrants sale will provide additional returns to taxpayers beyond the dividend payments it received on the preferred stock.

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Read all about this clip here:

• David Faber: Next In Line For A Taxpayer Bailout: Life Insurance Companies. How Guaranteed Variable Annuities Wrecked a Golden Goose

Comments

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NEW YORK, Sept 15 (Reuters) - American International Group Inc (AIG.N) may give existing shareholders 10-year warrants to keep them from exiting their holdings as the bailed-out insurer restructures, a source familiar with the matter said on Wednesday.

The idea of a sweetener for shareholders comes as the U.S. government and AIG look for ways for the government to exit its investment in the bailed-out insurer.

Talks on possible exit strategies have advanced past initial discussions, with a conversion of the Treasury Department's $49 billion preferred stake in AIG into common stock being one the options under discussion, sources have said previously.

http://www.reuters.com/article/idUSN1520136720100915

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