San Jose, Calif.-based Avidbank Holdings Inc. completed a private placement of $22 million in 10-year, fixed- to floating-rate subordinated notes due 2029 to certain qualified institutional and other accredited investors.
The notes are structured to qualify as Tier 2 capital for regulatory capital purposes. The company used proceeds from the placement to repurchase $12 million of subordinated notes previously outstanding. The remaining proceeds are intended to be used for general corporate purposes, including the support of capital levels and loan growth of its bank unit, Avidbank.
The unsecured notes initially bear interest at a fixed 5.0% per annum, payable semiannually for the first five years of the term, and then quarterly at a variable rate based on the then-current 3-month secured overnight financing rate plus 359.5 basis points.
The notes have a maturity date of Dec. 30, 2029.
Sandler O'Neill & Partners LP acted as sole placement agent for the private placement. Manatt Phelps & Phillips LLP served as legal counsel to Avidbank Holdings, and Holland & Knight LLP served as legal counsel to the placement agent.