Zions holders to convert $29.8 million of 2015 notes into preferreds

By Marisa Wong

Madison, Wis., Feb. 16 - Holders of Zions Bancorp.'s 6% subordinated notes due Sept. 15, 2015 elected to convert $29.8 million principal amount of the notes into the company's series A and series C preferred stock, according to an 8-K filing with the Securities and Exchange Commission.

The holders filed notice of their election to convert the notes on Feb. 15.

The notes will be converted into 1,176,160 depositary shares, each representing 1/40th of a share of series C preferred stock, and 14,800 depositary shares, each representing 1/40th of a series A preferred share.

As a result, the company expects to issue an additional 29,404 shares of series C preferreds and 370 shares of series A preferreds when the conversions close on March 15.

The cumulative amount of subordinated notes converted since June 2009 will be $692.3 million, of which $691.6 million will have been converted into series C preferreds and $700,000 will have been converted into depositary shares representing the series A preferreds. The company will have issued a total of 691,558 series C preferreds and 716 series A preferreds for the conversions.

The original principal amount of the subordinated notes was $1.21 billion. The expected remaining balance of convertible subordinated debt is $517.6 million. According to the filing, the unamortized discount on this debt will be $200.8 million as of March 31.

The next conversion dates for the subordinated notes will be as follows:

• May 15 for the 5.65% notes due May 15, 2014;

• May 16 for the 5.5% notes due Nov. 16, 2015; and

• Sept. 15, 2012 for the 6% notes due Sept. 15, 2015.

Zions is a financial services company based in Salt Lake City.

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