Magazine article American Banker

1st USA Issues Preferred; Huntington Bancshares Files for Debt Offering

Magazine article American Banker

1st USA Issues Preferred; Huntington Bancshares Files for Debt Offering

Article excerpt

Capital

First USA Inc., Dallas, issued five million shares of mandatory convertible preferred stock Tuesday, concurrently with a five-million-share offering of common stock by company stockholders.

Separately, Huntington Bancshares, Columbus, Ohio, and two foreign banking companies this week filed to issue up to $600 million of debt or preferred stock.

Both First USA equity issues were priced at $31.875 per share, giving the company net proceeds of $154.2 million, said a spokesman.

6.25% Dividend

The mandatory convertible preferred stock, known as preferred redeemable increased dividend equity securities, or Prides, pays a 6.25% dividend.

The company intends to use $50 million of the proceeds to pay off debt or to provide capital to one of its main subsidiaries, First USA Bank, its Delaware credit card bank, or to do both, the spokesman said.

First USA had 5.4 million cards issued at the end of last year.

Each Pride security mandatorily converts into one share of First USA common stock on May 20, 1998, unless either previously redeemed by the company or converted at the option of the holder.

Redemption Conditions

Beginning May 20, 1997, the company may redeem each Prides share with the number of shares of common stock whose worth is equal to $32.373, declining after April 19, 1998, to $31.875 but in no event less than 0.8333 of a share of common stock.

At any time before May 20, 1988, unless previously redeemed, each share of Prides will be convertible at the option of the holder onto 0. …

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