By Lisa Kerner
Charlotte, N.C., June 30 – Franklin Financial Network, Inc. placed $20 million of fixed-to-floating-rate subordinated notes due July 1, 2026 with institutional investors.
The notes are non-callable for five years and bear interest at a fixed rate of 7% per year, from and including June 30, 2016 to but excluding July 1, 2021.
From and including July 1, 2021 to the maturity date or early redemption date, the interest rate will reset quarterly to a level equal to Libor plus 604 bps, according to a news release and a form 8-K filed with the Securities and Exchange Commission.
The notes have been structured to qualify as tier 2 capital under regulatory guidelines.
Stephens Inc. served as sole placement agent.
Proceeds will be used to fund growth and for general corporate purposes.
The notes were assigned an investment-grade rating of BBB- by Kroll Bond Rating Agency.
The financial holding company is based in Franklin, Tenn.
| Issuer: | Franklin Financial Network, Inc.
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| Issue: | Fixed-to-floating subordinated notes
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| Amount: | $20 million
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| Maturity: | July 1, 2026
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| Coupon: | 7% up to July 1, 2021; then Libor plus 604 bps
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| Call: | Starting July 1, 2021 at par
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| Placement agent: | Stephens Inc.
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| Settlement date: | June 30
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| Rating: | Kroll: BBB-
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| Distribution: | Private placement
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