Security Federal plans to offer between $5 million to $15 million of 30-year convertibles to yield 8%

By Rebecca Melvin

New York, July 13 - Security Federal Corp. plans to offer between $5 million and $15 million of 30-year convertible senior debentures to yield 8%, with an initial conversion premium of about 67%, according to a filing with the Securities and Exchange Commission.

The debentures will be sold in minimum denominations of $5,000, and increments of $1,000, up to a maximum of $1 million per subscriber.

They will be non-callable for 10 years, and callable thereafter at 100% of the principal amount of the debentures.

Up to $5 million of the proceeds will be used to repay a line of credit with another financial institution. The unsecured line of credit has an interest rate equal to one month Libor plus 2%. At March 31, the interest rate was 2.52%.

Any remaining proceeds will be used for general corporate purposes, which may include future acquisitions as well as investments in or extensions of credit to Security Federal Bank and subsidiaries.

The convertibles will not be listed. Security Federal's common stock is quoted on the OTC Bulletin Board under the symbol "SFDL.OB."

Aiken, S.C.-based Security Federal is a savings and loan holding company for Security Federal Bank.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.