Independent Bank accepts 1.66 million shares in exchange offer for four series of trust preferreds

By Jennifer Chiou

New York, June 23 - Independent Bank Corp. said it accepted 1,657,255 total shares, or $41.4 million liquidation preference, of four series of trust preferred securities in its completed offer to issue up to 180.2 million of new common shares in exchange for the trust preferreds.

As a result, the company issued 51,091,250 new common shares in the offer that expired at 11:59 p.m. ET on June 22. The deadline was previously extended from June 1.

The number of shares issued for each trust preferred was:

• 30.8289 for the $50.6 million liquidation amount of 8.25% cumulative trust preferreds issued by IBC Capital Finance II. The total exchange value for these was $22.65 per $25.00 trust preferred;

• 1,172.0566 for the $12 million liquidation amount of floating-rate trust preferreds issued by IBC Capital Finance III. The total exchange value was $861.11 per $1,000 trust preferred;

• 1,176.7252 for the $20 million liquidation amount of floating-rate trust preferreds issued by IBC Capital Finance IV. The total exchange value was $864.54 per $1,000 trust preferred; and

• 1,185.8718 for the $7.5 million liquidation amount of floating-rate trust preferreds issued by Midwest Guaranty Trust I. The total exchange value was $871.26 per $1,000 trust preferred.

The number of shares issuable for each liquidation amount of trust preferreds tendered is equal to the total exchange value per trust preferred divided by $0.7347, which is the arithmetic average of the per-share volume-weighted average price of the company's stock for each trading day in the five-consecutive-trading-day period ended June 18.

Independent Bank previously noted that holders had tendered 731,862 trust preferreds issued by IBC Capital Finance II in the offer at 4 p.m. ET on June 4. The liquidation amount of the tendered securities was $18.3 million at that time.

At May 27, holders had tendered $7.5 million of trust preferreds for exchange.

When the offer began on April 23, the company was offering an early tender premium for trust preferreds tendered by May 17. This early deadline was later extended to coincide with the offer deadline, meaning all holders who tendered received the early tender premium.

The early tender premiums of $1.25 per 8.25% trust preferred and $50.00 per floating-rate trust preferred were included in the total exchange values noted above.

The company already said that it believes a high level of participation from its holders is critical to its capital-restoration plan.

Independent Bank previously added that it continues to exercise its right to defer quarterly payments on all of the trust preferreds and does not anticipate resuming the payments at any time in the near future, regardless of the level of participation in the exchange offer.

The exchange of at least $40 million of the preferreds was one condition to the company's ability to compel a conversion of the series B fixed-rate cumulative mandatorily convertible preferred stock held by the U.S. Department of the Treasury.

The information agent was D.F. King & Co., Inc. (bankers and brokers call collect at 212 269-5550, others call 800 431-9643).

Independent Bank is an Ionia, Mich.-based bank holding company.

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