The Waterbury parent of Webster Bank said today its capital base got a boost from an exchange of common stock for outstanding preferred stock and securities that to some degree went better than expected.
Webster Financial Corp., as part of today’s settlement of the exchange that ended Wednesday, will issue a total of about 11.3 million shares of common stock to retire 6 million shares of convertible preferred stock and another 5.3 million shares of Webster Capital Trust IV preferred securities.
“The successful completion of the exchange offer increases Webster’s tier 1 common equity to risk-weighted asset ratio by 128 basis points, reduces interest and dividend expenses by $19.2 million a year, and enhances internal capital generation,” said Webster Chairman and CEO James C. Smith.
The regional bank holding company originally planned to accept 168,500 shares, or $168.5 million, of convertible preferred, but said it will accept all 171,257 shares tendered on a pro rata basis.
Meanwhile, only a third of the $200 million liquidation amount of trust preferred securities Webster was prepared to exchange were tendered. The bank said it will accept all $63.9 million worth.
J.P. Morgan Securities Inc. and Barclays Capital Inc. acted as Webster’s financial advisors in connection with the exchange offer.
