PHILADELPHIA, May 20 /PRNewswire-FirstCall/ -- Sovereign Bancorp, Inc.
("Sovereign or the Company") (NYSE: SOV), parent company of Sovereign Bank
("Bank"), today announced that it has completed its previously announced
equity and debt offerings, which raised a total of approximately $1.9
billion for Sovereign and the Bank.
"By proactively taking action to raise additional capital we feel we
are well equipped to handle any further deterioration in the economy," said
Joseph P. Campanelli, Sovereign's President and CEO. "We are pleased that
our common stock offering was significantly oversubscribed and the interest
in the offering from investors in the U.S. and in Europe underscores their
confidence in the future of our company." Campanelli added, "We continue to
believe strongly in the fundamentals of our business, particularly related
to our focus on accelerating the performance of our retail franchise. Our
footprint in the Northeast U.S. has been much less affected by the housing
and economic downturn in other parts of the country, giving Sovereign an
important competitive advantage in the current environment."
Sovereign issued 179,687,500 shares of common stock at a purchase price
of $8.00 per share for net proceeds, after the underwriting discount and
offering expenses, of approximately $1.39 billion. The number of shares
sold includes 23,437,500 shares sold pursuant to the exercise in full of
the underwriter's over-allotment option.
In addition, the Bank issued $500 million of fixed rate subordinated
notes. The notes have a coupon of 8.75% and will mature as of May 30, 2018.
Lehman Brothers Inc. acted as the sole book-running manager for the common
stock and debt offering and Sandler O'Neill & Partners L.P. acted as
co-manager of the debt offering.
The capital raise places Sovereign's capital ratios in or above its
peer group. With the additional capital, Sovereign's capital ratios at both
the holding company and the Bank now exceed "well-capitalized" levels as
defined by the regulatory agencies for commercial banks and thrifts.
Sovereign intends to use the net proceeds of the offerings for general
corporate and banking purposes, including repayment of Federal Home Loan
Bank borrowings.
About Sovereign
Sovereign Bancorp, Inc., ("Sovereign") (NYSE: SOV), is the parent
company of Sovereign Bank, a financial institution with principal markets
in the Northeastern United States. Sovereign Bank has 750 community banking
offices, over 2,300 ATMs and approximately 12,000 team members. Sovereign
offers a broad array of financial services and products including retail
banking, business and corporate banking, cash management, capital markets,
wealth management and insurance. For more information on Sovereign Bank,
visit http://www.sovereignbank.com or call 1-877-SOV-BANK.
Forward-Looking Statements
The information contained in this press release includes
forward-looking statements. These forward-looking statements are subject to
the inherent uncertainties in predicting future results and conditions.
Certain factors could cause actual results and conditions to differ
materially from those projected in these forward-looking statements, and
these factors are enumerated in Sovereign's filings with the Securities and
Exchange Commission. This press release should be read in conjunction with
the company's recent SEC filings.
SOURCE Sovereign Bancorp, Inc.
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Related links:
http://www.sovereignbank.com
CONTACT:
FINANCIAL, Kirk Walters, +1-617-346-7346,
kwalter1@sovereignbank.com or Stacey Weikel, +1-610-320-8428,
sweikel@sovereignbank.com; MEDIA, Ed Shultz, +1-610-378-6159,
eshultz1@sovereignbank.com, all of Sovereign Bancorp, Inc.
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