First State launches tender offers for $95.2 million trust preferreds

By Angela McDaniels

Tacoma, Wash., June 10 - First State Bancorp. has begun tender offers and consent solicitations for $95.2 million outstanding liquidation amount of trust preferred securities, according to a company news release.

The company said the offers are part of its plan to recapitalize its balance sheet in order to be able to continue to operate through 2010 and beyond and to comply with a written agreement entered into with its principal regulators.

The securities eligible for the offers are:

• The $5 million trust preferreds issued by First State NM Statutory Trust III;

• The $10 million trust preferreds issued by First State NM Statutory Trust IV;

• The $7.5 million trust preferreds issued by First State NM Statutory Trust V;

• The $20 million trust preferreds issued by First State NM Statutory Trust VI;

• The $21 million trust preferreds issued by First State NM Statutory Trust VII;

• The $22.5 million trust preferreds issued by First State NM Statutory Trust VIII; and

• The $9.2 million trust preferreds issued by Front Range Capital Trust II.

The company is offering $150 per $1,000 liquidation amount of preferreds.

The offer for each series of trust preferreds will expire at 5 p.m. ET on July 7.

Each offer is conditioned on the receipt of enough consents to approve proposed amendments that are needed in order to permit the consummation of that offer. The proposed amendments are to the indenture governing the note underlying the relevant series of trust preferreds, the guarantee agreement relating to the relevant series of trust preferreds and the trust agreement of the applicable issuing trust.

Holders may not tender their trust preferreds without also delivering their consents and vice versa.

Each offer is also conditioned on the company's receipt of enough proceeds from an offering, sale or other financing transaction to purchase the tendered trust preferreds and to meet the requirements established by its banking regulators. The company must also receive approval from its banking regulators of the financing transaction and the payment of the purchase price in the tender offers.

The company said that it is exploring a variety of options to complete a financing transaction, but its ability to consummate a financing transaction is highly uncertain and there is no assurance that the financing condition will be satisfied.

First State is a Albuquerque-based commercial bank holding company.

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