Huntington holders exchange $35.5 million trust preferreds in offer

By Angela McDaniels

Tacoma, Wash., Dec. 29 - Huntington Bancshares Inc. said that $35.5 million of trust preferred securities were tendered in its exchange offer, which ended at 11:59 p.m. ET on Dec. 27. All of the tendered trust preferreds were accepted for exchange.

According to a company news release, holders tendered

• $27 million of Huntington Capital I's $132.63 million floating-rate capital securities;

• $500,000 of Huntington Capital II's $52 million floating-rate capital securities;

• $5 million of Sky Financial Capital Trust III's $75 million floating-rate capital securities; and

• $3 million of Sky Financial Capital Trust IV's $75 million floating-rate capital securities.

The settlement date is expected to be Dec. 29. After settlement, $299.13 million of trust preferreds not held by Huntington will remain outstanding, including $105.63 million of the Huntington Capital I securities, $51.5 million of the Huntington Capital II securities, $70 million of the Sky Financial III securities and $72 million of the Sky Financial IV securities.

As previously reported, the company offered to issue up to $300 million liquidation preference of depositary shares in exchange for up to $300 million liquidation preference of trust preferreds.

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

For each $1,000 of trust preferreds, holders will receive $1,000 liquidation preference of new depositary shares. This includes an early exchange premium, $50 liquidation preference of depositary shares, for each trust preferred tendered by the early exchange deadline.

On Dec. 13, the company extended the early exchange deadline to coincide with the exchange offer deadline. Before the extension, the early exchange deadline was 5 p.m. ET on Dec. 12.

In addition to the depositary shares, holders will receive $50 in cash for each Sky Financial trust preferred exchanged.

All holders who tendered will receive accumulated distributions in cash up to but excluding the settlement date.

The exchange offer began on Nov. 29. Huntington said it offered to exchange the trust preferreds because they 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.

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

Huntington Bancshares is a financial holding company based in Columbus, Ohio.

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