In an attempt to raise capital for enhancing shareholders'
Commerce Bancshares, Inc.
) recently announced the pricing of 6 million publicly offered
depositary shares. These shares offerings constitute 1/1000th
interest in the company's Series B non-cumulative perpetual
preferred stock which have total liquidity preference of $150
million ($25.00 per depository shares). Notably, the preferred
stocks form a part of the company's core capital.
The offering is anticipated to close on Jun 19, subject to certain
customary conditions. Further, the joint-book running managers of
the public offering include Morgan Stanley & Co. LLC - an arm
), Merrill Lynch, Pierce, Fenner & Smith Incorporated of
Bank of America Corporation
), and J.P. Morgan Securities LLC of
JPMorgan Chase & Co.
Simultaneous with the shares offering, Commerce Bancshares entered
into an accelerated share repurchase (:ASR) agreement with Morgan
Stanley. Per the deal, the former will buy back its shares for $200
million from the latter.
Commerce Bancshares will pay the stipulated amount to Morgan
Stanley on Jun 19, and will receive the majority of shares on the
same day. Remaining/additional stocks will be delivered once the
ASR program is completed (tentatively within the next 12 months).
However, the actual number of shares to be repurchased and the
price to be paid will be calculated considering the volume-weighted
daily average price of Commerce Bancshares' stocks during the ASR
Further, Commerce Bancshares intends to utilize the funds raised
through the latest offering and its excess capital to finance the
ASR program. Also, the company expanded its present share
repurchase program to 5.0 million shares keeping the ASR program in
Given its efficient capital deployment activities, Commerce
Bancshares remains an attractive pick for yield-seeking investors.
With its strong capital position, the company is anticipated to
continue boosting shareholders' value going forward.
Commerce Bancshares currently carries a Zacks Rank #2 (Buy).
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