KeyCorp, Capital One, BB&T, US Bancorp Offerings

123jump.com Staff
11 May, 2009
New York City

More banks use the current market conditions to raise additional capital and cut dividend to meet regulatory capital requirements. Capital One, KeyCorp, BB&T Corp and U.S. Bancorp filed or declared to raise capital.

[R]9:45 AM New York – More banks use the current market conditions to raise additional capital and cut dividend to meet regulatory capital requirements.[/R]

Four more banks announced to raise capital today. Capital One, KeyCorp, BB&T Corp and U.S. Bancorp filed or declared to raise capital.

BB&T Corp, the North Carolina based bank launched its public offering of $1.5 billion and cut its dividend. As of March 31, 2009 bank had consolidated total assets of $143.4 billion, consolidated loans of $100.2 billion, consolidated deposits of $90.6 billion and consolidated shareholders’ equity of $16.2 billion

Goldman Sachs and JP Morgan Chase are managing the offering.

The bank also lowered its annual dividend to 15 cents from 47 cents which will save $725 million.

Capital One Financial, which was not required under the Fed stress test to raise capital said that the credit card lender will sell 56 million shares and increase its outstanding shares to 451.66 million shares. Barclays is managing the offering.

The offering hopes to tap investors in China, UK, India and Dubai, Taiwan and Malaysia.

KeyCorp filed to sell as much as $750 million in common shares after the regulators asked the lender to raise $1.8 billion.

U.S. Bancorp is expected to sell five-year notes to raise at least $800 million and may exceed $1 billion according to two sources in New York and Chicago. The calls to the company media relations staff were not returned.

Offering Last Week

Morgan Stanley raised $8 billion, through $4 billion in common stock offering and $4 billion in bond offering. Morgan Stanley ((MS)) priced its debt, without the FDIC guarantee a key condition placed by regulators and priced its stock offering at $24 a share.

Wells Fargo ((WFC)) raised $8.6 billion selling 392.5 million shares in common stock offering today. The offering is expected to be complete and proceeds will be collected on May 13, 2009.

The original offering was announced May 7 and priced on Friday. J.P. Morgan Securities Inc. is acting with Wachovia Securities as joint managers for the offering.

Fed regulators asked Bank of America to raise $34 billion before November 9 and required it file a plan of action before June 8.

Bank of America ((BAC)) filed to sell 1.25 billion in common shares to complete the offering in the next few weeks. At Friday’s close price the offering may raise $17.8 billion, regulators have asked banks to add capital buffer of $35 billion.

The bank also filed to raise $3 billion of senior notes of 7.375% due May 2014. The debt is not guaranteed by the FDIC.

The bank in a presentation on its Web site noted that it may raise $17 billion in common stock offering, among other sale may sell First Republic and asset manager Columbia Management and sell assets in its portfolio. The bank will also exchange preferred stock at less than par for common stock. The bank also plans to save $7 billion in expenses in ‘other improvements pre-tax pre-provision earnings’ in the second and third quarters.

The bank had Tier 1 capital ratio of 10.09% and Tier 1 common capital ratio of 4.49% at the end of the first quarter ending in March 2009.