SVB talks $500 million mandatory convertible preferred stock to yield 6%-6.5%, up 20%-25%

By Abigail W. Adams

Portland, Me., March 8 – SVB Financial Group plans to price $500 million $50-par three-year depositary shares representing a 1/20th interest in the company’s $1,000-par series F mandatory convertible preferred stock after the market close on Thursday with price talk for a dividend of 6% to 6.5% and a threshold appreciation premium of 20% to 25%, according to a market source.

Goldman Sachs & Co. LLC and SVB Securities are bookrunners for the registered offering, which carries a greenshoe of $75 million.

There is dividend protection which includes a full one-way adjustment to the conversion rate for any increase in cash dividends above $0 per quarter.

There is takeover protection.

Concurrently, the company is pricing a follow-on offering of $1.25 billion shares of common stock.

Proceeds will be used for general corporate purposes.

SVB also announced that it sold $21 billion, or substantially all of its for-sale securities portfolio, which will result in an after-tax loss of $1.8 billion.

SVB is a Santa Clara, Calif.-based financial services company.

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