TCF Financial Corporation
) 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
TCF Financial plans to close the transaction by June 25, 2012,
subject to certain customary conditions.
Morgan Stanley & Co. LLC, a division of
) and UBS Securities LLC, an indirect wholly-owned subsidiary of
), 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
) - 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
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