Webster Financial to price $225 million perpetual convertible preferreds at 8%-8.5%, up 22.5%-27.5%

By Rebecca Melvin

New York, June 5 - Webster Financial Corp. plans to price $225 million of perpetual convertible preferred stock talked with a dividend of 8% to 8.5% and an initial conversion premium of 22.5% to 27.5%, according to a syndicate source.

Pricing was expected to occur after the close on Thursday.

Merrill Lynch & Co. is the bookrunner, with J.P. Morgan Securities Inc. and Sandler O'Neill & Partners LP acting as co-managers.

There is a $25 million over-allotment option for the registered offering.

The preferred stock will be non-callable for five years, and holders will have the right at any time to convert into common shares, plus cash in lieu of fractional shares.

Proceeds from the offering will be used for general corporate purposes, including increasing liquidity and capital.

Waterbury, Conn.-based Webster Financial (NYSE: WBS) is the holding company for Webster Bank, NA with $17.2 billion in assets.

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