Synovus sets exchange ratios in offer for 4 7/8% subordinated notes

By Jennifer Chiou

New York, Oct. 30 - Synovus Financial Corp. announced an early tender exchange ratio of 318.7099 shares per $1,000 principal amount of notes in its offer to exchange up to 50 million newly issued shares of its common stock for any and all of its 4 7/8% subordinated notes due 2013.

The offer was announced on Sept. 14.

As already announced, the company will issue a number of shares with a value equal to $750 for each $1,000 principal amount of notes accepted for exchange.

The above exchange ratio applies to holders who tender by 5 p.m. ET on Sept. 28. They will receive an additional number of shares with a value equal to $50.00 for each $1,000 principal amount of notes. Those who tender after that time will have an exchange ratio of 298.7905 shares per $1,000 principal amount.

The stock price used to determine the number of shares to be issued in exchange for the notes was $2.5101, which was equal to the average volume-weighted average price of the company's common stock for the five consecutive trading days ended on Oct. 29.

The expiration for the exchange offer is 11:59 p.m. ET on Nov. 2.

Capital plan

As already noted, the exchange offer is part of the company's plan to increase its tier 1 capital by about $400 million and improve its tangible common equity to tangible assets ratio by an amount that is representative of an additional $100 million of capital.

The plan also includes a public offering of up to $350 million of common stock and other balance sheet optimization initiatives.

The underwriters in the equity offering will have a 30-day over-allotment option for up to an additional 15% of the offered amount.

Proceeds from the stock sale will be used for working capital and general corporate purposes.

The company also announced a dividend of $0.01 per share payable on Oct. 1 to stockholders of record as of Sept. 17. Purchasers of common stock in the equity offering will not be entitled to the dividend.

Synovus said the successful completion of its capital plan would better position it to ultimately repay its roughly $1 billion in Troubled Asset Relief Program capital, give it greater operational and strategic flexibility, improve its ability to absorb additional losses that it could face under continuing or worsening adverse economic scenarios and give it a capital structure that would better enable it to address regulatory concerns as they may arise.

Global Bondholder Services Corp. (866 540-1500, attn: corporate actions) is the information agent for the exchange offer.

Synovus is a financial services holding company based in Columbus, Ga.

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