FirstMerit plans preferred issuance to raise funds for Citizens Republic acquisition

By Stephanie N. Rotondo

Phoenix, Jan. 28 - FirstMerit Corp. launched an offering of series A noncumulative perpetual preferreds on Monday, according to a prospectus filed with the Securities and Exchange Commission.

Bank of America Merrill Lynch, RBC Capital Markets LLC, Barclays and Credit Suisse Securities (USA) LLC are the joint bookrunners.

Each preferred will be issued as a depositary share representing a 1/40th interest.

When declared by the board of directors, dividends will be payable on a quarterly basis.

The company can redeem the preferreds on or after 2018 at par plus accrued dividends. The company also has an option to call the full amount of the preferreds within 90 days of a regulatory capital treatment event.

Proceeds will be used, along with funds from an offering of subordinated debt, to purchase Citizens Republic Bancorp Inc. and its series A cumulative TARP preferreds from the U.S. Department of Treasury.

FirstMerit has applied to list the new series of preferreds on the New York Stock Exchange under the symbol "FMCP."

FirstMerit is an Akron, Ohio-based bank holding company.

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