New Issue: Flagstar to raise $100.01 million from private placement of shares, convertible preferreds

By Devika Patel

Knoxville, Tenn., May 16 - Flagstar Bancorp, Inc. has arranged a $100.01 million private placement of common shares and mandatory convertible non-cumulative perpetual preferred shares, according to a company press release and an 8-K filed Friday with the Securities and Exchange Commission.

Flagstar will sell 11,365,000 common shares at $4.25 per share to institutional investors for $48.3 million and 635,000 common shares at $5.88 to Thomas Hammond and Mark Hammond for $3.73 million.

The company also will sell 47,982 preferreds at $1,000 apiece for $47.98 million. The preferreds will accrue dividends of 5%, payable quarterly in arrears.

After the company receives shareholder approval, the convertible preferreds will automatically convert into common stock at an initial conversion price of $4.25 per share.

Lehman Brothers is the agent.

Settlement is expected May 19.

Flagstar is a Troy, Mich.-based savings and loan holding company.

Issuer:	Flagstar Bancorp, Inc.
Issue:	Common stock, mandatory convertible non-cumulative perpetual preferred stock
Amount:	$100,017,050
Warrants:	No
Agent:	Lehman Brothers
Pricing date:	May 16
Settlement date:	May 19
Stock symbol:	NYSE: FBC
Stock price:	$5.95 at close May 15
Common shares
Amount:	$52,035,050
Shares:	12 million
Price:	$4.25 (for 11,365,000 shares), $5.88 (for 635,000 shares)
Investor:	Thomas Hammond and Mark Hammond (for $3,733,800)
Preferreds
Amount:	$47,982,000
Shares:	47,982
Price:	$1,000
Dividends:	5%, payable quarterly in arrears
Conversion price:	$4.25

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