Zions Bancorp. holders tender 29% of three notes series in exchange

By Susanna Moon

Chicago, March 29 - Zions Banc. said it completed its offer to exchange common stock for any and all of its outstanding nonconvertible subordinated notes.

As of 11:59 p.m. ET on March 26, investors had tendered $55.6 million, or about 29%, of the total outstanding principal amount of the three series of notes covered by the exchange. They include:

• $4.507 million principal amount, or 13%, of the $34.68 million principal amount of 5.65% notes;

• $38.142 million principal amount, or 47.41%, of the $80.445 million principal amount of 6% notes; and

• $12.932 million principal amount, or 17.24%, of the $75.01 million principal amount of 5.5% notes.

As a result, Zions will issue about 2.165 million common shares in exchange for the notes.

Zions will pay cash for accrued dividends up to the settlement date.

After settlement of the offer, there will remain outstanding $30.173 million principal amount of the 5.65% notes, $42.303 million principal amount of the 6% notes and $62.078 million principal amount of the 5.5% notes.

The company announced on March 26 the exchange ratios for the offer.

Zions said it would issue 39.7014 common shares for each $1,000 principal amount of 5.65% notes, 39.1469 common shares per $1,000 principal amount of 6% notes and 38.1488 common shares per $1,000 principal amount of 5.5% notes.

Each note was to be exchanged for a number of common shares equal to the note price divided by the stock price of $22.5433, which was the average of the volume-weighted average price of Zions' common stock (Nasdaq: ZION) during the five consecutive trading days ended March 24.

As previously stated, the note price was $895.00 for the 5.65% notes, $882.50 for the 6% notes and $860.00 for the 5.5% notes.

Zions previously said the offer will increase its tangible common equity by an amount roughly equal to the principal amount of the notes exchanged. It will also increase the company's tangible common equity ratio while reducing the interest expense associated with the notes.

Deutsche Bank Securities Inc. and Goldman Sachs & Co. were Zions' financial advisers. D.F. King & Co., Inc. (800 269-6427 or 212 269-5550) was the information agent.

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

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