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Fifth Third wraps exchange offer for 8.5% convertible preferreds
By Jennifer Chiou
New York, June 18 - Fifth Third Bancorp said that its exchange offer for the depositary shares representing its $1.1 billion of 8.5% non-cumulative perpetual convertible preferred stock, series G will result in the issue of 60,121,124 shares and a payment of $229,754,622 in cash.
Overall, $696,225,000 liquidation amount of Fifth Third's depositary shares were exchanged, which represents 62.86% of the total amount.
The exchange offer expired at 5 p.m. ET on June 17.
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 previously increased to $8,250 from $7,500.
Holders will also receive 2,158.8272 shares of common stock for each 250 depositary shares tendered. Settlement is set for June 22.
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 represents about three-and-a-half years of dividends.
The offer was 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 was the exchange agent. D.F. King & Co., Inc. (800 207-3158 or 212 269-5550) was the information agent.
Fifth Third Bancorp is a diversified financial services company based in Cincinnati.
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