UPDATE 1-Prudential to offer $1.25 bln in stock |
By Anurag Kotoky
June 1, 2009
* To use proceeds for general corporate purposes
* Declines Federal aid
June 1 (Reuters) - Prudential Financial Inc (PRU.N), the No. 2 U.S. life insurer, said it will offer $1.25 billion of its common stock, after turning down Federal aid from the U.S. Treasury's Capital Purchase Program.
Newark, New Jersey-based Prudential said it intends to use the net proceeds from the offering for general corporate purposes, which may include adding capital to its insurance and other subsidiaries, or repaying debt.
Citigroup and Goldman Sachs will serve as joint book-running managers for the offering, and the underwriters will have a 30-day option to purchase up to an additional 15 percent of the offered amount of common stock, the company said.
U.S. life insurers have been weakened by the global financial crisis, hurt by investment losses, and higher costs on investment-linked retirement products that guarantee returns.
Up to a dozen life insurers applied for federal funds last October and November. But since receiving preliminary approval for aid earlier this month, several companies, including Prudential Financial and Allstate Financial (ALL.N), have turned down the government's offer.
Shares of the company were down 89 cents at $39.02 before
the bell. They closed at $39.91 Friday on the New York Stock
Exchange. The shares traded as high as $88 last September.
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