First Niagara Financial has announced that it expects to offer and sell approximately $300m of common stock in an underwritten public offering through Keefe, Bruyette & Woods and Goldman, Sachs & Company.
The company intends to grant the underwriters an option to purchase up to an additional 15% of the shares sold to cover over-allotments, if any.
First Niagara intends to use the net proceeds from this offering to enhance its capital levels in anticipation of the closing of its acquisition of 57 Western Pennsylvania branches, $4.2 billion of deposits and $839m in loans from National City Bank; to facilitate repayment of the $184m in preferred stock issued to the US Treasury Department pursuant to the capital purchase programme and the related warrant for common stock; and for general corporate purposes.
In addition, First Niagara also has the option to sell to The PNC Financial Services, and if it so elects PNC is obligated to purchase, up to 6.82m shares of company common stock, not to exceed an aggregate purchase price of $75m; and the company may elect to sell to National City, and if it so elects National City is obligated to purchase, up to $150m of 12% senior notes due 2014, which notes are redeemable in whole or in part prior to maturity.
