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 GLENDALE, Calif., Aug. 20 /PRNewswire/ -- Glendale Federal Bank today announced that it has entered into agreements to sell $250 million of its common stock in a rights offering to existing holders of securities of the bank and its parent corporation, GLENFED Inc. (NYSE: GLN), backed by standby commitments from institutional and other investors. Glendale Federal has also entered into an underwriting agreement with The First Boston Corp. and Friedman, Billings, Ramsey & Co. Inc. for the purchase and sale in a public offering of $175 million of its 8.75 percent Noncumulative Preferred Stock, Series E. The Series E preferred stock will be convertible 13 months after initial issuance into common stock of the bank at an initially stated conversion price of $11.70 per common share, subject to final determination on the basis of the market price of the bank common stock six months after initial issuance.
 Stephen J. Trafton, chairman and chief executive officer of Glendale Federal, commented, "The execution of these agreements sets the stage for completion of what we believe to be the largest, and certainly the most complex, financial restructuring of a troubled financial institution ever done."
 Thursday, Aug. 26, has been set as the date for completion of the merger of GLENFED into a subsidiary of Glendale Federal Bank, the reclassification of the outstanding preferred stock of the bank, the exchange offer for the outstanding GLENFED debentures, the issuance and sale of the new Series E preferred stock and the issue and sale to standby purchasers in the rights offering of $169 million of common stock of the bank. The remaining $81 million of the $250 million rights offering is scheduled to commence on Friday, Aug. 27, and will expire on Monday, Sept. 13.
 The new common stock of Glendale Federal Bank, expected to be issued on Aug. 26, has been listed for trading on the New York Stock Exchange and the Pacific Stock Exchange and will begin trading today under the symbol "GLNwi" on a "when issued" basis. The Series E preferred stock, as well as the Series D preferred stock of the bank that will be issued upon completion of the reclassification of existing preferred stock and the stock purchase rights to be offered in the rights offering, have also been listed on the New York Stock Exchange and will also begin trading today under the symbols "GLNPREwi", "GLNPRDwi" and "GLNrtwi", respectively, on a "when issued" basis.
 Glendale Federal Bank has been operating under a prompt corrective action directive issued by the Office of Thrift Supervision (OTS) which required the bank to raise additional capital and to reach specified capital requirements higher than those generally applicable to savings institutions. The OTS has modified that directive to provide that, on condition that the initial closing is completed by Aug. 21, the deadline for completion of the recapitalization is extended to Sept. 24, to accommodate the proposed timing for completion of the rights offering. Upon completion of these transactions, the bank's proforma capital ratios as of June 30, 1993, adjusted for regulatory scheduled changes through Sept. 30, 1993, are expected to be 4.77 percent core and 9.55 percent risk-based capital, which are $49 million and $55 million, respectively, above the 4.5 percent core and 9.0 percent risk-based capital ratios that the directive requires the bank to meet at Sept. 30, 1993.
 The rights offering will be completed in two phases. The Standby Agreements with the standby purchasers provide for the issuance and sale of up to $250 million of bank common stock at the subscription price for the rights offering of $9.00 per share. For acting in this capacity, the standby purchasers will also receive seven-year warrants to purchase an aggregate of 10.85 million additional shares of bank common stock at an exercise price of $12.00 per share, exercisable following the first anniversary after completion of the recapitalization. The standby purchasers will purchase $169 million of bank common stock on Aug. 26.
 The second phase of the rights offering is expected to commence on Aug. 27 and expire on Monday, Sept. 13. Bank common stock will be offered at a subscription price of $9.00 per share to the recipients of transferable stock purchase rights that will be listed for trading on the New York Stock Exchange. The rights are expected to be issued on Aug. 26 to the holders on that date of GLENFED common stock, GLENFED debentures tendered in the exchange offer and the reclassified outstanding preferred stock of the bank. The standby purchasers will purchase additional bank common stock on or about Sept. 17 in an amount equal to $81 million minus the aggregate purchase price of the shares purchased by rights holders or their transferees pursuant to the exercise of their rights.
 The new Series E preferred stock will have a par value of $1.00 per share and a liquidation preference of $25.00 per share. The Series E preferred stock will not be redeemable prior to Oct. 1, 1998. It will be redeemable thereafter, at the option of the bank, at an initial redemption price of $26.09375 per share, decreasing annually to $25.00 per share if redeemed after Oct. 1, 2003.
 This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Such offers will only be made by the final offering circulars relating to such securities.
 Glendale Federal Bank is the nation's fifth largest savings bank. It provides community banking services through 215 banking offices in California, Florida and Washington State.
 -0- 8/20/93
 /CONTACT: Judy Cunningham, 818-500-2274, or Jeff Misakian, 818-500-2824, both of Glendale Federal/

CO: Glendale Federal Bank; GLENFED Inc. ST: California IN: FIN SU: TNM

JB-MF -- LA007 -- 4663 08/20/93 10:41 EDT
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Publication:PR Newswire
Date:Aug 20, 1993

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