By Rebecca Melvin
New York, Dec. 4 - Security Federal Corp. priced $6.1 million of 30-year convertible senior debentures at par to yield 8% with an initial conversion premium of about 78%, according to a news release Friday.
Security Federal initially planned to price an offering of between $5 million and $15 million, which was launched in July.
Pricing came at the talked price point for the coupon and beyond the rich end of 67% talk for the initial conversion premium.
The debentures are convertible into the company's common stock at a conversion rate of 50 shares of common stock for each $1,000 principal amount of debentures, which is equivalent to a conversion price of $20.00 per share.
The convertibles are non-callable for 10 years and callable thereafter at 100% of the principal amount of the debentures.
Proceeds are expected to be used to repay all or a portion of a line of credit with another financial institution. Remaining net proceeds will be available for general corporate purposes.
Proceeds may temporarily be invested by the company in short-term securities or deposited in interest-bearing accounts with the bank or third parties.
The convertibles will not be listed. Security Federal's common stock is quoted on the OTC Bulletin Board under the symbol "SFDL."
Aiken, S.C.-based Security Federal is a savings and loan holding company for Security Federal Bank.
| Issuer: | Security Federal Corp.
|
| Issue: | Convertible senior debentures
|
| Amount: | $6.1 million
|
| Maturity: | 2029
|
| Coupon: | 8%
|
| Price: | Par, $1,000
|
| Yield: | 8%
|
| Conversion premium: | 78%
|
| Conversion price: | $20.00
|
| Conversion ratio: | 50
|
| Call protection: | Non-callable for 10 years, then at par
|
| Price talk: | 8%, up 67%
|
| Pricing date: | Dec. 4
|
| Distribution: | Registered
|
| Stock symbol: | OTCBB: SFDL
|
| Stock reference price: | $11.25
|
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