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Superior Bancorp defers interest payments on $122 million junior notes
By Susanna Moon
Chicago, Aug. 24 - Superior Bancorp deferred regularly scheduled interest payments on $122 million principal amount of junior subordinated notes relating to its five different issues of trust preferred securities, according to an 8-K filing with the Securities and Exchange Commission.
Superior said the deferral is consistent with its previously announced capital optimization plan.
The action has no impact on the operation of Superior Bank, the principal subsidiary of the company, the release said.
During the deferral period, the respective trusts will likewise suspend the declaration and payment of dividends on the trust preferreds.
Under the note terms, the company may defer payments without default or penalty for up to five years.
All accrued interest will be due on the junior subordinated notes, and a corresponding amount of distributions will be payable on the trust preferreds, upon the termination or expiration of the deferrals.
Also, during the deferral periods, the company may not pay cash dividends on or repurchase its common stock or preferred stock nor make any payment on outstanding debt that rank equally with or junior to the junior subordinated notes.
Accordingly, the company also suspended the cash payment of dividends on $11 million in principal amount of its preferred stock.
The company said it estimates that the deferral of interest payments on the junior subordinated notes and the suspension of cash dividends on the preferreds will preserve about $7 million per year in cash flow.
Superior Bancorp is a thrift holding company based in Birmingham, Ala.
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