New Issue: Sterling announces plans for $730 million stock, preferreds placement

By Devika Patel

Knoxville, Tenn., Aug. 20 - Sterling Financial Corp. arranged a $730 million private placement of common stock, series B convertible participating preferred stock and series D convertible participating voting preferred stock on Aug. 19, according to an 8-K filed Friday with the Securities and Exchange Commission.

The company will sell 155,268,000 common shares at $0.20 apiece to about 30 investors for $31.05 million. In addition, it will sell 68,366,000 common shares at the same price to Thomas H. Lee Equity Fund VI, LP, Thomas H. Lee Parallel Fund VI, LP and Thomas H. Lee Parallel (DT) Fund, VI, LP for $13.67 million and an additional 68,366,000 common shares to Warburg Pincus Private Equity X, LP for $13.67 million. The total common shares being sold are 292 million for $58.4 million.

The per-share price reflects a 69.23% discount to the closing share price of $0.65 on Aug. 18.

The company is selling both series of preferreds at $92.00 apiece. It will sell 3,881,700 series D preferreds to the 30 investors for $357.12 million, 1,709,150 series B preferreds to the Thomas H. Lee group for $157.24 million and 1,709,150 series B preferreds to Warburg Pincus for $157.24 million.

The Thomas H. Lee group and Warburg Pincus will also receive warrants for common stock.

Settlement is expected Aug. 26.

Sterling is a bank holding company based in Spokane, Wash.

Issuer:	Sterling Financial Corp.
Issue:	Common stock, series B convertible participating preferred stock, series D convertible participating voting preferred stock
Amount:	$730 million
Warrants:	Yes
Investors:	Thomas H. Lee Equity Fund VI, LP, Thomas H. Lee Parallel Fund VI, LP, Thomas H. Lee Parallel (DT) Fund, VI, LP (for $170,915,000), Warburg Pincus Private Equity X, LP (for $170,915,000)
Pricing date:	Aug. 19
Settlement date:	Aug. 26
Stock symbol:	Nasdaq: STSA
Stock price:	$0.64 at close Aug. 19
Market capitalization:	$31.84 million
Common stock
Amount:	$58.4 million
Shares:	292 million
Price:	$0.20
Series B preferreds
Amount:	$314,483,600
Shares:	3,418,300
Price:	$92.00
Series D preferreds
Amount:	$357,116,400
Shares:	3,881,700
Price:	$92.00

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