By Stephanie N. Rotondo
Seattle, May 23 – Heritage Commerce Corp. priced $40 million of 5.25% $1,000-par fixed-to-floating rate subordinated notes due 2027 (expected ratings: Kroll: BBB) on Tuesday, the company said in an FWP filed with the Securities and Exchange Commission.
The deal – first announced on Monday – was increased from $30 million.
Sandler O’Neill +Partners LP and Keefe Bruyette & Woods are the bookrunners.
The interest rate will be fixed for five years. Beginning June 1, 2022, the rate will begin to float at Libor plus 336.5 basis points with a 0% Libor floor.
The paper becomes callable on June 1, 2022 at par plus accrued interest. The notes can be called prior to that date upon a tax or regulatory capital treatment event, or if Heritage is required to register as an investment company under the Investment Company Act of 1940.
Proceeds will be used for general corporate purposes, including the payment of dividends, continued debt service, advances to the banking unit to finance its activities and potential acquisitions.
Heritage Commerce is a San Jose, Calif.-based bank holding company.
| Issuer: | Heritage Commerce Corp.
|
| Securities: | Fixed-to-floating rate subordinated notes
|
| Amount: | $40 million
|
| Maturity: | June 1, 2027
|
| Bookrunners: | Sandler O’Neill +Partners LP and Keefe Bruyette & Woods
|
| Coupon: | 5.25%; beginning June 1, 2022, converts to a floating rate of Libor plus 336.5 bps with a 0% Libor floor
|
| Price: | Par of $1,000
|
| Yield: | 5.25%
|
| Call options: | On or after June 1, 2022 at par plus accrued interest; or prior to that date upon a tax or regulatory capital treatment event, or if Heritage is required to register as an investment company under the Investment Company Act of 1940
|
| Pricing date: | May 23
|
| Settlement date: | May 26
|
| Expected rating: | Kroll: BBB
|
| Cusip: | 426927AD1
|
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