Fifth Third increases cash portion of exchange offer for $1.1 billion 8.5% convertible preferreds

By Angela McDaniels

Tacoma, Wash., June 4 - Fifth Third Bancorp has increased the cash payment component of its exchange offer for the depositary shares representing its $1.1 billion 8.5% non-cumulative perpetual convertible preferred stock, series G, according to a company news release.

Each depositary share represents a 1/250th interest in a share of the preferred stock. The cash payment for each set of 250 depositary shares tendered was increased to $8,250 from $7,500.

Holders will also receive 2,158.8272 shares of common stock for each 250 depositary shares tendered.

The offer is equivalent to 8.6353 common shares and $33 in cash for each depositary share. The number of common shares represents the regular conversion ratio and the $30 payment originally on offer representing about three-and-a-half years of dividends.

The exchange offer will expire at 5 p.m. ET on June 17.

The offer is part of the company's plan to improve its tier 1 common equity ratio as required under the U.S. Treasury's Supervisory Capital Assessment Program. Fifth Third was told it must raise $1.1 billion in additional tier 1 common equity.

The company will use proceeds from an at-the-market offering of its common stock to fund the cash portion of the exchange offer. On June 4, Fifth Third increased the stock offering to $1 billion from $750 million.

Wilmington Trust FSB is the exchange agent. D.F. King & Co., Inc. (800 207-3158 or 212 269-5550) is the information agent.

Fifth Third Bancorp is a diversified financial services company based in Cincinnati.

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