Moody's ups Lincoln to positive, rates notes Baa2

Moody's Investors Service said it changed the outlook of Lincoln National Corp.'s long-term credit ratings to positive from stable.

Moody's also said it assigned a Baa2 debt rating to its $300 million 10-year issuance of fixed-rate senior unsecured notes.

The proceeds will be used to call its retail 6.75% coupon preferred securities, which will improve its earnings and cash flow coverage. The notes are a drawdown from a shelf registration filed in March 2009, the agency said.

The outlook change reflects improving trends in the company's financial profile, specifically its financial flexibility, profitability and general account investment performance, Moody's said.

The agency said it expects further reductions in its financial leverage to the low 20% range over the next 18 months and continued improvement in the company's earnings coverage, driven both by lower interest expense and stronger GAAP and statutory earnings.

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