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Published on 3/16/2011 in the Prospect News PIPE Daily.

United Community heralds $380 million placement of stock, preferreds

Investor Corsair Capital to buy securities at $1.90 for a 22.5% stake

By Devika Patel

Knoxville, Tenn., March 16 - United Community Banks, Inc. said it arranged a private placement of common shares and mandatorily convertible preferred shares. The deal will raise $380 million, and Corsair Capital, LLC is among the investors.

The company will sell common shares at $1.90 apiece. It also will sell preferreds, which will mandatorily convert to common stock at $1.90 per common share once the company obtains approval for these shares. Upon conversion, Corsair will own 22.5% of the company's equity.

The price per share and conversion price is a 40.74% premium to the March 15 closing share price of $1.35.

The Blairsville, Ga.-based bank also said it plans to sell about $293 million of substandard and nonperforming loans in a series of bulk transactions during the second quarter of 2011. In addition, the bank plans to dispose of about $142 million of foreclosed properties during the second and third quarters.

Issuer:United Community Banks, Inc.
Issue:Common shares, mandatorily convertible preferred shares
Amount:$380 million
Warrants:No
Investor:Corsair Capital, LLC
Pricing date:March 16
Stock symbol:Nasdaq: UCBI
Stock price:$1.53 at close March 16
Market capitalization:$144.87 million
Common shares
Price:$1.90
Preferred shares
Conversion price:$1.90

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