By Angela McDaniels
Tacoma, Wash., Oct. 28 - Western Alliance Bancorp. registered $141 million of series B noncumulative perpetual preferred stock for resale in an S-3 filing with the Securities and Exchange Commission.
The bank sold the preferreds to the Treasury Department on Sept. 27 under its Small Business Lending Fund program.
The Treasury, or any other holder to whom the Treasury has transferred its registration rights, may offer the preferreds from time to time at varying prices.
The 141,000 preferreds have a liquidation preference of $1,000 each.
Dividends are payable quarterly when declared by the board of directors. During the first 10 quarters, the dividend rate fluctuates between 1% and 5% based on the change in the bank's amount of qualified small business lending compared to the initial baseline.
The baseline is $1.52 billion, which is the average of the bank's quarter-end qualified small business lending for the four quarters ended June 30, 2010.
Beginning in the 11th quarter, the dividend rate will be fixed at 7% if the bank's qualified small business lending level as of Sept. 30, 2013 is less than or equal to the baseline. Otherwise, it will be fixed at between 1% and 5% based on how much the lending amount increased from the baseline.
Four and a half years after the preferreds were issued, the dividend rate will increase to 9%.
Any reduction in the dividend rate to below 5% prior to the four-and-a-half-year anniversary of the issuance date will not apply to the portion of the then-outstanding preferreds that is greater than the amount of the increase in the qualified small business lending from the baseline. Dividends on any portion of the liquidation amount that is in excess of the amount of the increase will be payable at 5% until the four-and-a-half-year anniversary, resulting in a blended dividend rate that will apply to each preferred.
Because of the company's participation in the TARP Capital Purchase Program, if its qualified small business lending amount is not above the baseline level at the end of the ninth dividend period, it must also pay a lending incentive fee of 0.5%, beginning with dividend payment dates on or after April 1, 2014 and ending on April 1, 2016.
Subject to the approval of the Federal Reserve Board, the preferreds are callable at par plus accrued dividends at any time.
Western Alliance is a multi-bank holding company based in Phoenix.
| Issuer: | Western Alliance Bancorp.
|
| Issue: | Series B noncumulative perpetual preferred stock
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| Amount: | $141 million
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| Preferreds: | 141,000
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| Liquidation amount: | $1,000
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| Dividends: | For first 10 quarters, a rate that fluctuates between 1% and 5% depending on the bank's amount of qualified small business lending; beginning in 11th quarter, 7% if lending amount as of Sept. 30, 2013 remains flat or decreases from baseline, otherwise fixed rate of 1% to 5% based on how much lending amount increased; after four and a half years, 9%; payable quarterly
|
| Call option: | At par plus accrued dividends, subject to Fed approval
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