By Lisa Kerner
Charlotte, N.C., Oct. 16 – SBT Bancorp, Inc. issued a $7.5 million 6.75% unsecured subordinated term note due Oct. 1, 2025 to Community Funding CLO, Ltd. on Oct. 15.
Proceeds will be used to redeem a portion of the 9,000 shares of the company’s senior non-cumulative perpetual preferred stock, series C, that were issued to the Treasury as part of the company’s participation in the Small Business Lending Fund program. Also, proceeds will be used to support the growth of SBT’s primary operating subsidiary, Simsbury Bank & Trust Co., Inc., and for other general corporate purposes.
The note was issued under a Sept. 30 subordinated loan agreement, according to a form 8-K filed with the Securities and Exchange Commission.
The note will bear interest at a fixed rate of 6.75% except that from closing date through, but not including, Feb. 11, 2016, Community Funding will rebate an amount equal to 3.4% per annum to the company, resulting in a rate of 3.35% per annum, net of any payments of interest.
Interest is payable quarterly in arrears on Jan. 1, April 1, July 1 and Oct. 1 of each year.
SBT may prepay all or a portion of the principal amount of the note on or after the fifth anniversary of the closing date. Prior to the fifth anniversary, SBT can prepay all or a portion of the principal amount of the note only under limited specified circumstances set forth in the loan agreement.
SBT Bancorp and Simsbury Bank & Trust are based in Simsbury, Conn.
| Issuer: | SBT Bancorp, Inc.
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| Issue: | Unsecured subordinated term note
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| Amount: | $750 million
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| Coupon: | 6.75%
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| Maturity: | Oct. 1, 2025
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| Distribution: | Private placement
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| Purchaser: | Community Funding CLO, Ltd.
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| Settlement: | Oct. 15
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