Sterling Financial's tender offer is first step in raising capital

By Lisa Kerner

Charlotte, N.C., Feb. 3 - Sterling Financial Corp.'s recently announced plan to begin tender offers and consent solicitations for 10 series of trust preferred securities is the initial step in its capital-raising process, according to a Sterling spokesperson.

The trust preferreds have a total outstanding principal amount of $238 million, according to an 8-K filing with the Securities and Exchange Commission.

Sterling's spokesperson said the capital-raising process is expected to be completed in the first quarter.

In December, the company said it was making progress toward meeting the requirements of the consent agreement entered into with its regulators in October.

Sterling Savings Bank is required, under the agreement, to increase its tier 1 capital level.

The company said it is working with Sandler O'Neill + Partners, LP to evaluate all capital options, including private-placement and public-market offerings, and conversion of other debt and equity securities to common stock.

When announcing its trust preferreds offers, Sterling said it is exploring options for raising the funds needed for the offers but gave no assurance that the financing condition will be satisfied.

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

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