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CoBank offers new preferreds in exchange for series A preferreds
By Angela McDaniels
Tacoma, Wash., July 27 - CoBank has begun an exchange offer and consent solicitation for its series A cumulative perpetual preferred stock, according to a bank news release.
For each $1,000 liquidation preference of series A preferreds tendered by 5 p.m. ET on Aug. 7, the bank will issue $1,000 liquidation preference of series D non-cumulative subordinated perpetual preferred stock.
For each $1,000 liquidation preference of series A preferreds tendered after that time but before 11:59 p.m. ET on Aug. 21, CoBank will issue $950 liquidation preference of series D preferreds.
The bank is soliciting consents to a proposed amendment to the preferred stock purchase agreement under which the series A preferreds were issued. The proposed amendment would eliminate some restrictions on CoBank's ability to make open-market purchases or exchanges of the series A preferreds, thereby allowing CoBank to complete the exchange offer.
CoBank needs consents from holders of at least a majority of the outstanding series A preferreds.
Holders may consent without tendering their preferreds, but holders who tender must also submit consents.
The bank said that the successful completion of the offer will result in an enhanced capital position with a higher core surplus ratio under Farm Credit Administration regulations.
Barclays Capital Inc. (800 438-3242) and Morgan Stanley & Co. Inc. (800 624-1808) are the dealer managers, and Global Bondholder Services Corp. (866 294-2200 or, for bankers and brokers, 212 430-3774) is the information agent.
CoBank is a Denver-based cooperative bank and a member of the Farm Credit System
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