Customers Bancorp Inc (CUBI) has priced their previously announced subordinated notes.
The notes are priced at 5.375% for 2.6 million shares (bonds) with another 390,000 for overallotments.
The issue is rated BBB- by Kroll Bond Rating. They define this as medium quality.
No ticker has been announced so one will have to keep their eyes open for it if you have an interest. We will post it when known.
The early call feature is not available to the company until 2029–10 years instead of the more typical 5 years.
CUBI has numerous preferreds outstanding which can be seen here.
The pricing term sheet can be read here.
Symbol to be CUBB when approved for trading..
Customers Bancorp, Inc. (NYSE: CUBI) the parent company of Customers Bank and its operating division BankMobile (collectively the “Company” or “Customers”), today announced the closing of its previously announced underwritten public offering of $74,750,000 aggregate principal amount of 5.375% Subordinated Notes due 2034, which included $9,750,000 of Subordinated Notes issued pursuant to the full exercise by the underwriters of their overallotment option. The price to the purchasers was 100% of the principal amount of the Subordinated Notes. Interest will be payable quarterly in arrears on each March 30, June 30, September 30 and December 30 of each year beginning on March 30, 2020.
The Subordinated Notes received an investment grade rating of BBB- from Kroll Bond Rating Agency, Inc., an independent, unaffiliated rating agency.* The Company has applied to list the Subordinated Notes on the New York Stock Exchange under the symbol “CUBB,” and, if approved for listing, trading in the Subordinated Notes is expected to begin within 30 days after the closing date.
Customers expects to receive net proceeds of $72,075,375 from the offering, after deducting underwriting discounts and commissions and estimated offering expenses. Customers expects to use the net proceeds for general corporate purposes, which may include working capital and the funding of organic growth at Customers Bank. Customers also may use a portion of the net proceeds to redeem shares of its preferred stock once they become redeemable, repurchase shares of its common stock, or fund, in whole or in part, possible future acquisitions of other financial services businesses.
The joint book-running managers for the offering are B. Riley FBR, Inc., D.A. Davidson & Co. and Janney Montgomery Scott LLC. The lead managers for the offering are William Blair & Company, L.L.C. and Boenning & Scattergood, Inc. The co-managers for the offering are Incapital LLC, Maxim Group LLC and Wedbush Securities Inc.
I know this has been a watch point with low refi rates ,but here is a statement from CUBI’s inv. Presentation so watch existing calls! Done no other work yet looking at existing issues. JA
“Evaluate opportunities to redeem preferred stock”
• Redeeming all preferred stock as it becomes callable (currently, dividends paid to our preferred shareholders reduce
diluted earnings per share by approximately $0.46)
• Will continue to analyze the best ways to execute this over the next two years subject to liquidity and capital needs
Joel – The benefit of retiring the outstanding preferreds when they become callable has been mentioned by CUBI on at least the last two conference calls. To generalize, CUBI-C, CUBI-D and CUBI-E are all fixed to floating rate issues that were issued when CUBI was considered a lesser credit than it is today and, therefore, they are all issued with very high relative LIBOR + floating rates. Theoretically that makes them all economically refundable in any interest rate environment when their first call dates come up, provided CUBI remains an improving or stable credit.