Huntington starts exchange offer for $300 million trust preferreds

By Jennifer Chiou

New York, Nov. 29 - Huntington Bancshares Inc. announced the start of an offer to issue up to $300 million liquidation preference of depositary shares in exchange for up to $300 million liquidation preference of several series of its existing trust preferred securities.

Each depositary share represents a 1/40th interest in the company's floating-rate series B non-cumulative perpetual preferred stock with a liquidation preference of $1,000 per share.

The offer will end at 11:59 p.m. ET on Dec. 27.

For each $1,000 of preferreds, those who tender prior to 5 p.m. ET on Dec 12 will receive $1,000 liquidation preference of new depositary shares for the following capital securities involved in the offer:

• $132.63 million of Huntington Capital I floating-rate capital securities with an acceptance priority level of 1;

• $52 million of Huntington Capital II floating-rate capital securities, also with an acceptance priority level of 1;

• $75 million of Sky Financial Capital Trust III floating-rate capital securities with an acceptance priority level of 1 and an additional cash consideration of $50.00; and

• $75 million of Sky Financial Capital Trust IV floating-rate capital securities with an acceptance priority level of 2 and an additional cash consideration of $50.00.

The total consideration above includes an early exchange premium of $50.00 liquidation preference of the depositary shares. The company said that it will also pay accrued distributions.

In an S-4 filed with the Securities and Exchange Commission, the company registered the maximum 12 million depositary shares and the corresponding 300,000 floating-rate series B preferreds.

Settlement is slated for Dec. 29.

Huntington said that it is conducting this offer because the trust preferreds will cease to be considered tier 1 capital beginning in 2013 under the bank capital and liquidity standards by the Basel Committee on Banking Supervision.

Global Bondholder Services Corp. is the information agent and exchange agent (866 612-1500 or call collect 212 430-3774). Goldman, Sachs & Co. is the dealer manager (800 828-3182 or call collect 212 902-5183).

The issuer is a Columbus, Ohio-based multi-state diversified financial holding company.

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