TCF Financial Offers Preferred Stock - Analyst Blog

By
A A A

On Monday, TCF Financial Corporation ( TCB ) offered 6 million depositary shares to general public at an offer price of $25 per depository share. Each share represents a 1/1,000th interest in a share of the company's Series A Non-Cumulative Perpetual Preferred Stock. The Preferred stock has a par value of 1 cent per share.

The stock offering will inculcate gross proceeds of $150 million in total. Moreover, TCF Financial has also given an option to purchase an additional 0.9 million depositary shares to cover over-allotments, if any, to the underwriters. The additional shares will also be issued at $25, yielding gross proceeds of $22.5 million.

TCF Financial plans to close the transaction by June 25, 2012, subject to certain customary conditions.

Morgan Stanley & Co. LLC, a division of Morgan Stanley ( MS ) and UBS Securities LLC, an indirect wholly-owned subsidiary of UBS AG ( UBS ), served as joint book-running managers for TCF Financial. Moreover, RBC Capital Markets, LLC and Stifel, Nicolaus & Company, Incorporated - a subsidiary of Stifel Financial Corporation ( SF ) - acted as co-managers.

TCF Financial also announced that quarterly dividends will be paid on these securities at an annual rate of 7.50%. The company declared that dividends, as and when declared by the Board of Directors on a non-cumulative basis, will be paid on March 1, June 1, September 1 and December 1 of each year. The first dividend will be paid on September 1, 2012.

The net proceeds from the offering are expected to be used for redeeming 10.75% Junior Subordinated Notes, Series I worth $115.01 million. This includes redemption of 10.75% Capital Securities, Series I (Trust Preferred Securities) worth $115.0 million and $10,000 worth of 10.75% Common Securities, Series I issued by TCF Capital I. Further, TCF Financial plans to use the remaining proceeds for general corporate purposes.

Moreover, redemption of Trust Preferred Securities would enable TCF Financial to lower the interest costs, as these securities demand higher rates compared to others. Moreover, according to Dodd-Frank Act, beginning 2013, banks will no longer be able to consider these securities as regulatory capital.

TCF Financial currently retains a Zacks #3 Rank, which translates into a short-term 'Hold' rating.


 
MORGAN STANLEY (MS): Free Stock Analysis Report
 
STIFEL FINL (SF): Free Stock Analysis Report
 
TCF FINL CORP (TCB): Free Stock Analysis Report
 
UBS AG (UBS): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: MS , SF , TCB , UBS

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

73%
100%
100%
50%

Most Active by Volume

48,099,947
  • $16.09 ▲ 0.50%
40,277,806
  • $102.50 ▲ 0.24%
40,236,499
  • $19.57 ▲ 2.35%
31,092,510
  • $49.75 ▲ 0.65%
30,795,218
  • $34.92 ▲ 0.78%
29,910,855
  • $3.63 ▲ 0.83%
24,019,154
  • $13.06 ▼ 0.38%
23,753,906
  • $74.82 ▲ 1.31%
As of 8/29/2014, 04:04 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com