Webster sets exchange ratio for Webster Capital 7.65% trust preferreds

By Susanna Moon

Chicago, June 23 - Webster Financial Corp. said it will issue 82.0755 common shares plus accrued distributions in cash for each $1,000 liquidation amount of 7.65% fixed- to floating-rate trust preferred securities of Webster Capital Trust IV, guaranteed by Webster.

The exchange ratio was determined by dividing $650 by $7.9195, the average volume-weighted average price of Webster common stock during the averaging period.

As announced on May 28, Webster also is offering to exchange 35.8046 common shares and $350 in cash for each share of its 8.5% series A convertible preferred stock.

The exchange offer will expire at 11:59 p.m. ET on June 24.

Webster previously said the completion of the exchange offer will fortify the composition of its capital structure by improving its tier 1 common and tangible common equity ratios and reduce the dividend and coupon expense associated with the securities exchanged.

Webster said the amount of securities it may accept in the exchange offer is limited by Treasury restrictions on the use of cash to repurchase securities in connection with the Treasury's $400 million preferred stock investment in Webster and New York Stock Exchange rules.

The Treasury has approved the use of up to $59 million in cash for the convertible preferreds, which means Webster can exchange $168.5 million of the securities.

Under certain conditions, NYSE rules restrict issuance of common stock in an unregistered offering to below 20% of a company's current issued and outstanding shares. Accordingly, Webster may issue up to 10,531,135 shares in the offer. If the offering is oversubscribed, Webster will accept the securities on a prorated basis.

J.P. Morgan Securities Inc. and Barclays Capital Inc. are financial advisers.

Global Bondholder Services Corp. (866 540-1500 or 212 430-3774) is the information agent and exchange agent.

Waterbury, Conn.-based Webster Financial is the holding company for Webster Bank, NA.

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