Village Bank and Trust Financial Corp. of Midlothian, Va., closed a $5.7 million private placement of subordinated notes.
Ten accredited investors took part in the offering. The notes pay an annual interest rate of 6.50% until March 21, 2023, after which they will pay a rate equal to three-month London Interbank Offered Rate plus 3.73%. They mature March 31, 2028.
Net proceeds are estimated at $5.5 million and will go toward the redemption of up to $5.0 million of the company's series A preferred stock. The redemption is expected to save common shareholders approximately $160,000 per year, after tax, compared to the redeemed stock's dividends.
FIG Partners LLC and Williams Mullen served as Village Bank and Trust's placement agent and legal counsel, respectively. Silver Freedman Taff & Tiernan LLP was legal counsel to FIG Partners.
Village Bank and Trust Financial is the $477.4 million-asset holding company of Village Bank.