WATERBURY, Conn. – Webster Financial Corp. (NYSE: WBS) has announced that it will sell $225 million worth of convertible preferred stock to “increase its liquidity and provide for additional capital.”
The company – the parent of Webster Bank N.A., which has 10 branches in Rhode Island – said it will offer 225,000 shares, and will grant the underwriters a 30-day option to purchase up to $25 million of additional shares of preferred stock.
Webster Financial said the holders of its preferred stock will have the right at any time to convert each share of preferred stock into 36.8046 shares of Webster’s common stock.
That represents an initial conversion price of approximately $27.17 per share of common stock – or a 22.5-percent conversion premium – based on the June 5 closing price of Webster’s common stock on the New York Stock Exchange, of $22.18 per share.
The conversion rate, and thus the conversion price, will be subject to adjustment under certain circumstances, the company said. In addition, the holders of the preferred stock will have the right under certain circumstances to convert each share of preferred stock into Webster common stock, at an increased conversion rate. And after June 15, 2013, Webster said, the company will have the right under certain circumstances to cause the preferred stock to be converted into shares of Webster common stock.
Merrill Lynch & Co. is acting as the sole book-running manager for the offering, while JPMorgan and Sandler O’Neill & Partners L.P. are acting as co-managers of the offering.
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Webster Financial Corp. (NYSE: WBS) is the holding company for Webster Bank N.A., a provider of business and consumer banking services through 181 banking offices, 343 ATMs, the telephone and the Internet. Webster has $17.2 billion in assets. Additional information is available at websterbankonline.com.
