Doral holders tender $63.3 million of preferreds in exchange offer

By Angela McDaniels

Tacoma, Wash., March 23 - Doral Financial Corp. received tenders for $63.3 million liquidation amount, or 15.3%, of its preferred stock in an exchange offer that expired at 11:59 p.m. ET on March 19, according to a company news release.

The company offered to exchange up to 16.5 million shares of its common stock for four series of its preferreds.

Holders tendered:

• $15,833,050 of the company's $63,341,350 7% noncumulative monthly income preferreds, series A;

• $11,274,175 of its $44,566,525 8.35% noncumulative monthly income preferreds, series B;

• $21,579,925 of its $89,480,050 7.25% noncumulative monthly income preferreds, series C; and

• $14,658,500 of its $218.04 million of 4.75% perpetual cumulative convertible preferreds.

Holders will receive 4.12 shares of common stock for each $50 liquidation amount of 7% preferreds, 2.06 shares for each $25 liquidation amount of 8.35% preferreds or 7.25% preferreds and 20.59 shares for each $250 liquidation amount of convertible preferreds.

In each case, the value of the shares is equal to approximately 26% of the liquidation preference of the preferreds being exchanged.

The total number of common shares to be issued is approximately 5.22 million.

The company first announced plans for the exchange offer on Dec. 22. It began Feb. 11, and the expiration date was extended to March 19 from March 12.

Doral Financial said the exchange strengthens its capital position by increasing its tier 1 common capital to risk-weighted assets to 8.18% from 7.16% and its tangible common equity to tangible assets to 5.06% from 4.44%.

UBS Investment Bank (888 719-4210 or 203 719-4210) was the dealer manager, and MacKenzie Partners, Inc. (800 322-2885 or 212 929-5500) was the information agent and exchange agent.

San Juan, Puerto Rico-based Doral Financial is the holding company for Doral Bank.

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