Capitol Bancorp holders exchange $19.2 million of trust preferreds

By Angela McDaniels

Tacoma, Wash., Feb. 1 - Capitol Bancorp Ltd. received tenders for $19.2 million of trust preferred securities in an exchange offer that expired at 11:59 p.m. ET on Jan. 31, according to an 8-K filing with the Securities and Exchange Commission.

The trust preferreds subject to the offer totaled $170.8 million and included:

• $25.3 million issued by Capitol Trust I;

• $10 million issued by Capitol Trust II;

• $15 million issued by Capitol Trust III;

• $3 million issued by Capitol Trust IV;

• $10 million issued by Capitol Trust VI;

• $10 million issued by Capitol Trust VII;

• $20 million issued by Capitol Trust VIII;

• $10 million issued by Capitol Trust IX;

• $33 million issued by Capitol Bancorp Trust X;

• $20 million issued by Capitol Trust XI; and

• $14.5 million issued by Capitol Trust XII.

Holders tendered $11.8 million of Capital Trust I's trust preferreds and $7.4 million of Capitol Truxt XII's trust preferreds. The company also received enough consents to make amendments to the indenture and guarantee agreements for these trust preferreds.

The company offered 1,000 shares for each $1,000 liquidation amount of the trust preferreds. The company's common stock closed at $0.24 (Pink Sheets: CBCR) on Feb. 1.

The exchange offer is part of the company's capital strategy focused on enhancing its common equity and regulatory capital levels. The capital initiatives also include a shareholder rights offering, development entity exchange offers and a potential reverse stock split.

Capitol Bancorp said that because of its weakened financial condition and recent changes affecting the ability of bank holding companies to include trust preferreds in regulatory capital computations, a small portion of its trust preferred are included in its current regulatory capital measurements and will cease to be includable in the future.

Interest payments on the trust preferreds have been deferred since mid-2009.

Capitol Bancorp is a banking company with head offices in Lansing, Mich., and Phoenix.

© 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.