completed the public offering of $40 million aggregate principal amount offixed-to-floating rate subordinatednotes due 2026 on March 31, according to a Form 8-K filed the sameday.
The noteswere issued pursuant to an indenture dated as of March 31 between the Franklin,Tenn.-based company and U.S. Bank NA, as trustee, as supplemented by the firstsupplemental indenture, dated as of the same day between the company and thetrustee.
They areunsecured, subordinated debt obligations of the company and will mature onMarch 30, 2026. From and including the date of issuance, to but excluding March30, 2021, the notes will bear interest at an initial rate of 6.875% per annum.From and including March 30, 2021 and thereafter, the notes will bear interestat a floating rate equal to three-month LIBOR as calculated on each applicabledate of determination, plus a spread of 5.636%.
On March29, Franklin Financial Network entered into an underwriting agreement withMerrill Lynch Pierce Fenner & Smith Inc., as representative of several underwriters,with respect to the company's issuance and sale of the notes.
Settlementfor the offering of the notes occurred March 31.
The netproceeds from the offering will be used, in part, to pay down a line ofcredit, which the company used on March 25 to redeem 10,000 outstanding sharesof series A senior noncumulative perpetual preferred stock issued to the U.S. TreasuryDepartment pursuant to the company's participation in the program. Thecompany will use the remainder of the net proceeds for general corporatepurposes.