First State cancels tender offer for $95.2 million trust preferreds

By Jennifer Chiou

New York, July 12 - First State Bancorp. terminated its tender offers and consent solicitations for up to $95.2 million liquidation amount of its trust preferred securities after receiving an insufficient number of tenders, according to an 8-K filing with the Securities and Exchange Commission.

When the offers began on June 9, the company said they were part of its plan to recapitalize its balance sheet in order to be able to continue to operate through 2010 and beyond and to comply with a written agreement entered into with its principal regulators.

First State said in the 8-K that along with wholly owned subsidiary First Community Bank, it will continue to pursue opportunities to strengthen capital.

The securities eligible for the offers were:

• The $5 million trust preferreds issued by First State NM Statutory Trust III;

• The $10 million trust preferreds issued by First State NM Statutory Trust IV;

• The $7.5 million trust preferreds issued by First State NM Statutory Trust V;

• The $20 million trust preferreds issued by First State NM Statutory Trust VI;

• The $21 million trust preferreds issued by First State NM Statutory Trust VII;

• The $22.5 million trust preferreds issued by First State NM Statutory Trust VIII; and

• The $9.2 million trust preferreds issued by Front Range Capital Trust II.

The company was offering $150 per $1,000 liquidation amount of preferreds.

The offer for each series of trust preferreds expired at 5 p.m. ET on July 7.

Each offer was conditioned on the receipt of enough consents to approve proposed amendments that are needed in order to permit the consummation of that offer. The proposed amendments were to the indenture governing the note underlying the relevant series of trust preferreds, the guarantee agreement relating to the relevant series of trust preferreds and the trust agreement of the applicable issuing trust.

Holders could not tender their trust preferreds without also delivering their consents and vice versa.

Each offer was also conditioned on the company's receipt of enough proceeds from an offering, sale or other financing transaction to purchase the tendered trust preferreds and to meet the requirements established by its banking regulators. The company had to also receive approval from its banking regulators of the financing transaction and the payment of the purchase price in the tender offers.

The company previously said that it was exploring options to complete a financing transaction, but its ability to consummate a financing transaction was highly uncertain and there was no assurance that the financing condition would be satisfied.

First State is an Albuquerque-based commercial bank holding company.

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