By Jennifer Chiou
New York, Feb. 3 – Enterprise Bancorp, Inc. issued $15 million of fixed-to-floating subordinated notes due 2030 through a private placement on Jan. 30 to an accredited investor, according to an 8-K filing with the Securities and Exchange Commission.
The notes will mature on Jan. 30, 2030 and will bear interest at a fixed rate of 6% per year through Jan. 30, 2025 and then at one-month Libor plus 390 bps through Jan. 30, 2030.
Beginning on Jan. 30, 2020, Enterprise may redeem the notes in whole or in part at the redemption price plus accrued interest to the redemption date.
The redemption price is 104 on or after Jan. 30, 2020 but before Jan. 30, 2022; 103 on or after Jan. 30, 2022 but before Jan. 30, 2025; and par if redeemed on or after Jan. 30, 2025.
“We plan on using a [$10.5 million] portion of the subordinated note proceeds to pay off in March 2015 our $10.5 million of trust preferred securities,” chief executive officer Jack Clancy said in a news release.
“The trust preferred securities were issued in 2000 and have an interest rate of 10.875%. The net result of the issuance of the subordinated notes and the payoff of the trust preferred securities is a $4.5 million increase in regulatory capital and a net cumulative pre-tax savings of approximately $1.7 million over the next 10 years.”
The remainder of the net proceeds will be for general corporate purposes.
Based in Lowell, Mass., the company is principally engaged in the business of attracting deposits from the general public and investing in commercial loans and investment securities.
| Issuer: | Enterprise Bancorp, Inc.
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| Issue: | Fixed-to-floating subordinated notes
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| Amount: | $15 million
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| Maturity: | Jan. 30, 2030
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| Coupon: | 6% per year through Jan. 30, 2025, then one-month Libor plus 390 bps through Jan. 30, 2030
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| Call: | At 104 on or after Jan. 30, 2020 but before Jan. 30, 2022; 103 on or after Jan. 30, 2022 but before Jan. 30, 2025; and par if redeemed on or after Jan. 30, 2025
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| Settlement date: | Jan. 30
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| Distribution: | Private placement
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