Zions completes tender offer for preferreds, notes exchange offer

By Jennifer Chiou

New York, July 2 - Zions Bancorp ended its modified Dutch auction tender offer for its series A floating-rate non-cumulative perpetual preferred stock, purchasing 4,020,435 depositary shares, and also wrapped its exchange offer for its subordinated notes, according to an 8-K filing with the Securities and Exchange Commission.

The tender offer expired on June 26. It began on June 1.

In the tender, the company offered to purchase up to 4 million of the depositary shares that each represent a 1 /40th ownership interest in the preferreds.

Holders were invited to submit bids of $10.00 to $11.50 per depositary share, and the company will pay $11.50. Each depositary share represents $25 liquidation preference of preferreds.

The closing price of the depositary shares on May 29 was $11.10.

The company previously said the offers are two of three actions being taken to modify and enhance its capital. The third component is an equity distribution agreement with Goldman Sachs & Co. under which the company may offer and sell through or to Goldman Sachs, from time to time, up to $250 million of its common stock.

The company planned to use proceeds from the sale of shares to fund the tender offer. Any remaining proceeds from the sale of common stock will be used for general corporate purposes.

Goldman Sachs (800 828-3182 or 212 357-4692) was the dealer manager. D.F. King & Co., Inc. (800 901-0068 or 212 269-5550) was the information agent for the tender.

Exchange offer

The company ended its exchange offer for its three outstanding series of subordinated notes. It began on June 1.

In all, the company issued $230,135,000 principal amount of a corresponding newly issued series of subordinated notes for an equal amount of exchanged notes.

Now that the offer is complete, the company executed a supplemental indenture to modify the terms of any notes not exchanged in the offer to allow those notes to be converted into 40 depositary shares each representing a 1 /40th ownership interest in a share of either, at the option of the holder, the company's series A preferreds or its 9.5% series C non-cumulative perpetual preferreds.

Each newly issued series of subordinated notes will be identical to the corresponding series of outstanding subordinated notes except for this new conversion feature.

J.P. Morgan Securities Inc. was the company's financial adviser in connection with the exchange offer, and Global Bondholder Services Corp. (866 857-2200 or 212 430-3774) was the information agent.

Zions is a bank based in Salt Lake City.

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