By Rebecca Melvin
New York, May 20 - Regions Financial Corp. priced $250 million of 1.5-year mandatory convertible preferred stock after the close Wednesday with a dividend of 10% and an initial conversion premium of 10%, according to a release.
Concurrently Regions priced $1.6 billion of common stock, or 400 million shares at $4 a share.
Both offerings have a 15% greenshoe.
Goldman, Sachs & Co. and J.P. Morgan Securities Inc. were joint bookrunning managers of both registered offerings, with Morgan Keegan & Co. Inc. as lead manager.
In addition, Regions has begun an exchange offer of common shares for outstanding 6.625% trust preferred securities, under which Regions will issue no more than 112 million shares of common stock.
The 250,000 mandatory convertible preferred shares, with a liquidation preference of $1,000 a share, will convert into common stock on Dec. 15, 2010, unless converted earlier at the option of holders.
The cash offers and exchange offer "are the first steps of a comprehensive capital plan to satisfy the $2.5 billion Tier 1 common equity requirement prescribed by the Federal Reserve's Supervisory Capital Assessment Program, which Regions currently expects will be accomplished without further investment by the U.S. Treasury," the company said.
Regions is a Birmingham, Ala.-based financial services holding company.
| Issuer: | Regions Financial Corp.
|
| Issue: | Mandatory convertible preferred shares
|
| Amount: | $250 million
|
| Bookrunners: | Goldman Sachs and JP Morgan
|
| Greenshoe: | $37.5 million
|
| Maturity: | Dec. 15, 2010
|
| Dividend: | 10%
|
| Price: | Par
|
| Yield: | 10%
|
| Conversion premium: | 10%
|
| Minimum conversion rate: | 227.2727 common shares
|
| Maximum conversion rate: | 250 common shares
|
| Pricing date: | May 20
|
| Settlement: | May 27
|
| Distribution: | Registered
|
| Stock symbol: | NYSE: RF
|
| Market capitalization: | $3.40 billion
|
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