Financial Winners and Losers: Lincoln

Updated from 2:47 p.m. EDT

Lincoln National (LNC Quote) was among the worst decliners in the financial sector Monday after the insurer announced plans to raise capital, including taking bailout money from the government.

Lincoln National shares fell 10.8% after the life insurer and financial planner said it intends to raise more than $2 billion in fresh capital, in part through a $600 million stock offering and a $500 million senior debt offering.

Lincoln National will also accept as much as $950 million in capital by selling preferred shares under the U.S. Treasury's Capital Purchase Program. The company also said it will sell its U.K. operations to Sun Life Financial (SLF Quote) for about $320.8 million. The stock dropped $1.92 to $15.83.

In May, the Treasury granted preliminary approval for some insurers to receive capital infusions under the Troubled Assets Relief Program, or TARP, including Lincoln National, Hartford Financial (HIG Quote), Allstate (ALL Quote), Ameriprise (AMP Quote), Prudential (PRU Quote) and Principal Financial (PFG Quote).

Principal, Prudential, Allstate and Ameriprise have already declined to accept TARP funds.

Most insurance stocks were losing ground Monday on Lincoln National's announcement. Hartford tumbled 11.2%, Principal lost 6.8%, Allstate slipped 2%, and Prudential finished down 1.5%. Ameriprise, meanwhile, added 1.9% to close at $24.78..

In other insurer news, Genworth Financial (GNW Quote) said it has paid in full its remaining 2009 long-term debt obligations. Genworth said it paid $331 million on its senior notes due Monday. Genworth has no long-term debt maturities until 2011, the company said. Shares ended the session down 5.9% to $6.33.

Elsewhere, The Financial Times reported that Citigroup (C Quote) will unveil a $1.25 billion funding tie-up with the International Finance Corporation, the private sector arm of the World Bank. The tie-up could mark a new willingness by banks to finance trade in emerging markets, the report said. Citi shares sank 2.9% to $3.37.