Synovus holders tender $29.82 million 4 7/8% notes in exchange offer

By Angela McDaniels

Tacoma, Wash., Nov. 3 - Synovus Financial Corp. said it received approximately $29.82 million principal amount, or 12.6%, of its $236.57 million of 4 7/8% subordinated notes due 2013 during an exchange offer that ended at 11:59 p.m. ET on Nov. 2.

The company offered to exchange up to 50 million newly issued shares of its common stock for any and all of the notes. It will issue approximately 9.44 million shares in exchange for the tendered notes, according to a company news release.

Holders will receive a number of shares with a value equal to $750 for each $1,000 principal amount of notes. Holders who tendered by 5 p.m. ET on Sept. 28 will receive an additional number of shares with a value equal to $50 for each $1,000 principal amount of notes.

The number of shares to be issued is 318.7099 for each note tendered by the early tender date and 298.7905 for each note tendered after that time.

The stock price used to determine the exchange ratios was the average volume-weighted average price of the company's common stock for the five consecutive trading days ending on Oct. 29.

The exchange offer began on Sept. 14, and the settlement date is expected to be Nov. 5.

Capital plan

As previously reported, the exchange offer is part of the company's plan to increase its tier 1 capital by approximately $400 million and improve its tangible common equity-to-tangible assets ratio by an amount that is representative of an additional $100 million of capital.

The plan also includes a public offering of up to $350 million of common stock and other balance sheet optimization initiatives.

The underwriters in the equity offering will have a 30-day over-allotment option for up to an additional 15% of the offered amount.

Proceeds from the stock sale will be used for working capital and general corporate purposes.

The company also announced a dividend of $0.01 per share paid on Oct. 1 to stockholders of record as of Sept. 17. Purchasers of common stock in the equity offering will not be entitled to the dividend.

Synovus said the successful completion of its capital plan would better position it to ultimately repay its approximately $1 billion in Troubled Asset Relief Program capital, give it greater operational and strategic flexibility, improve its ability to absorb additional losses that it could face under continuing or worsening adverse economic scenarios and give it a capital structure that would better enable it to address regulatory concerns as they may arise.

Global Bondholder Services Corp. (866 540-1500, attn: corporate actions) was the information agent for the exchange offer.

Synovus is a financial services holding company based in Columbus, Ga.

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