By Lisa Kerner
Charlotte, N.C., Nov. 4 - First Merchants Corp. issued $70 million of debt to four institutional investors on Friday, according to an 8-K filing with the Securities and Exchange Commission.
The debt was issued as follows:
• $5 million of 5% fixed-to-floating-rate senior notes due 2028; and
• $65 million of 6.75% fixed-to-floating-rate subordinated notes due 2028.
The interest rate on all the notes remains fixed for the first 10 years and will become floating thereafter, the filing said.
Proceeds were used to pay off the company's $55 million credit facility with Bank of America, NA, which was scheduled to mature on Feb. 15, 2015.
First Merchants intends to use the balance of the proceeds toward the redemption of the remaining 34,043 shares of its series B senior non-cumulative perpetual preferred stock held by the U.S. Department of the Treasury under the Small Business Lending Fund Program.
The company expects the subordinated debt will be treated as tier 2 capital for regulatory capital purposes.
First Merchants is a Muncie, Ind., financial services holding company.
| Issuer: | First Merchants Corp.
|
| Issue: | Senior and subordinated notes
|
| Amount: | $70 million
|
| Distribution: | Private placement
|
| Settlement: | Nov. 1
|
|
|
| Senior notes
|
| Amount: | $5 million
|
| Coupon: | Fixed at 5% for 10 years, then a floating rate
|
| Maturity: | 2028
|
|
|
| Subordinated notes
|
| Amount: | $65 million
|
| Coupon: | Fixed at 6.75% for 10 years, then a floating rate
|
| Maturity: | 2028
|
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