By Devika Patel
Knoxville, Tenn., July 30 - Severn Bancorp, Inc. priced a private placement of units for between $10 million and $25 million, according to an 8-K filed Wednesday with the Securities and Exchange Commission.
The company will sell between 100 and 250 units at $100,000 each.
Each unit consists of 6,250 series A 8% non-cumulative convertible preferred shares, valued at $50,000, and a $50,000 8% redeemable subordinated note.
Dividends on the preferreds are payable quarterly in arrears. Each preferred is convertible, at the option of the holder, into one common share at any time. Severn Bancorp may force conversion on or after Dec. 31, 2013.
The notes will pay interest quarterly in arrears. The notes will be redeemable in whole or in part by Severn Bancorp at any time beginning on Dec. 31, 2009 until maturity on Dec. 31, 2018.
Settlement is expected latest by Nov. 15.
Proceeds will be used for general corporate purposes.
Severn Bancorp, based in Annapolis, Md., is a savings and loan holding company.
| Issuer: | Severn Bancorp, Inc.
|
| Issue: | Units of 6,250 series A 8% non-cumulative convertible preferred shares and a redeemable subordinated note.
|
| Amount: | $10 million (minimum), $25 million (maximum)
|
| Units: | 100 (minimum), 250 (maximum)
|
| Price: | $100,000
|
| Warrants: | No
|
| Pricing date: | July 30
|
| Settlement date: | Nov. 15
|
| Stock symbol: | Nasdaq: SVBI
|
| Stock price: | $5.75 at close July 29
|
|
|
| Preferreds
|
| Amount: | $5 million (minimum), $12.5 million (maximum)
|
| Shares: | 625,000 (minimum), 1,562,500 (maximum)
|
| Price: | $8.00
|
| Dividends: | 8%
|
| Conversion ratio: | 1 to 1
|
|
|
| Notes
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| Amount: | $5 million (minimum), $12.5 million (maximum)
|
| Maturity: | Dec. 31, 2018
|
| Coupon: | 8%
|
| Price: | Par of $50,000
|
| Yield: | 8%
|
| Call: | Any time after Dec. 31, 2009
|
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