By Devika Patel
Knoxville, Tenn., April 20 - Doral Financial Corp. gave further details about a $600 million private placement in an 8-K filed Tuesday with the Securities and Exchange Commission. The deal was announced Monday.
Of the $600 million, $180 million is permanent capital to support the company's capital position and growth. The 180 million non-contingent tranche will consist of approximately 180,000 mandatorily convertible non-cumulative non-voting preferred shares with a $1.00 par value and $1,000 liquidation preference per share.
The remaining $420 million of the $600 million is contingent upon completing an FDIC-assisted acquisition and will be held in escrow and returned to investors if the acquisition is not completed. This $420 million contingent tranche will consist of approximately 13 million common shares and about 359,000 preferreds.
In addition, as part of the non-contingent tranche, the company will issue approximately 105,000 preferreds into escrow. These preferreds will have a liquidation value of $105 million, which will be released to purchasers if the acquisition is not consummated.
The securities will have an effective sale price of $4.75 per common share equivalent if the acquisition is completed or $3.00 per common share equivalent if the acquisition does not occur and the escrow is released.
The preferreds will mandatorily convert into common shares at an initial conversion price of $4.75 per share, or approximately 114 million common shares if an acquisition is consummated and about 60 million common shares if an acquisition is not consummated.
Barclays Capital is the agent.
Proceeds will be used to provide additional capital.
The bank holding company is based in San Juan, Puerto Rico.
| Issuer: | Doral Financial Corp.
|
| Issue: | Mandatorily convertible non-cumulative non-voting preferred stock, common stock
|
| Amount: | $600 million
|
| Warrants: | No
|
| Agent: | Barclays Capital
|
| Announcement date: | April 19
|
| Pricing date: | April 20
|
| Stock symbol: | NYSE: DRL
|
| Stock price: | $5.43 at close April 19
|
| Market capitalization: | $452 million
|
|
|
| Preferreds
|
| Shares: | 539,000 (approximate)
|
| Price: | $1,000.00
|
| Conversion price: | $4.75
|
| Conversion ratio: | Into about 114 million shares if acquisition is consummated, otherwise into about 60 million shares
|
|
|
| Stock
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| Shares: | 13 million (approximate)
|
| Price: | $4.75 (if acquisition is consummated), $3.00 (if acquisition is not consummated)
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