Carmel, Ind.-based Merchants Bancorp priced an underwritten public offering of 5 million depositary shares.
Each depositary share represents a 0.025 ownership interest in a share of the company's 6.00% fixed-to-floating rate noncumulative perpetual preferred stock, series B, with a liquidation preference of $25.00 per depositary share.
Dividends will be payable quarterly in arrears on Jan. 1, April 1, July 1 and Oct. 1 of each year, beginning Oct. 1, 2019. The dividend rate will be 6.00% per annum from the date of issuance to, but excluding, Oct. 1, 2024. From, and including, Oct. 1, 2024, dividends will be paid at a floating rate equal to the three-month London interbank offered rate plus a spread of 456.9 basis points per annum.
Merchants Bancorp may redeem the preferred stock at its option, subject to regulatory approval, at a price equal to $25.00 per depositary share, plus any declared and unpaid dividends, on or after Oct. 1, 2024, or within 90 days following a regulatory capital treatment event.
The offering is expected to close Aug. 19. The company filed an application to list the depositary shares with the Nasdaq Capital Market under the symbol MBINO. If the application is approved, trading of the securities is expected to begin within 30 days after the original issue date.
Merchants Bancorp expects to use the net proceeds from the offering for general corporate purposes, which include supporting balance sheet growth of unit Merchants Bank of Indiana.
Morgan Stanley & Co. LLC and UBS Securities LLC are serving as joint book-running managers for the offering. Sandler O'Neill & Partners LP is acting as co-manager.