By Kenneth Lim
Boston, June 19 - Fifth Third Bancorp priced its $1 billion offering of perpetual convertible preferred stock close to the cheap end of talk, with a dividend of 8.5% and an initial conversion premium of 25%.
The offering was talked at a dividend rate of 8% to 8.5% and an initial conversion premium of 22.5% to 27.5%.
There is an over-allotment option for an additional $150 million.
Goldman Sachs, Credit Suisse and Merrill Lynch & Co. were the bookrunners of the registered shelf offering.
The preferreds were sold in the form of depositary shares of $100 each. Each depositary share represents a 1/250th interest in shares of the convertible preferred stock.
The preferreds may be mandatorily converted at the issuer's option after the fifth year, subject to a hurdle at 130% of the conversion price.
The preferreds have takeover protection.
Fifth Third, a Cincinnati-based regional bank, said it will use the proceeds for general corporate purposes.
| Issuer: | Fifth Third Bancorp
|
| Issue: | Depositary shares representing 1/250 of series G convertible preferred stock
|
| Bookrunners: | Goldman Sachs & Co., Credit Suisse and Merrill Lynch & Co.
|
| Amount: | $1 billion
|
| Greenshoe: | $150 million
|
| Maturity: | Perpetual
|
| Dividend: | 8.5%
|
| Price: | Par of $100 per depositary share
|
| Conversion premium: | 25%
|
| Conversion price: | $11.575
|
| Conversion ratio: | 8.6393 per depositary share (2,159.8272 per preferred share)
|
| Takeover protection: | Yes
|
| Mandatory conversion: | Non-callable before June 30, 2013; mandatorily convertible thereafter subject to hurdle at 130% of conversion price
|
| Price talk: | 8%-8.5%, up 22.5%-27.5%
|
| Pricing date: | June 18, after the close
|
| Settlement date: | June 25
|
| Distribution: | Registered
|
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