San Francisco-based First Republic Bank priced $400 million in aggregateprincipal amount of its subordinated notes maturing Aug. 1, 2046, unlessredeemed earlier.
Interest is 4.375% per year and will be paid semiannually inarrears Feb. 1 and Aug. 1 of each year, starting Feb. 1, 2017.
As previously disclosed, the net proceeds from the offering may beused for general corporate purposes, which may include funding loans orpurchasing investment securities for its portfolio. The company may also usethe net proceeds, together with cash on hand, to redeem, subject to allapplicable regulatory approvals, its 6.70% noncumulative perpetual preferred stock.The preferred stock is redeemable in whole or in part at First Republic Bank'soption on or after Jan. 30, 2017.
The subordinated notes are intended to qualify as Tier 2capital for bank regulatory purposes.
Merrill Lynch Pierce Fenner & Smith Inc., J.P. MorganSecurities LLC and Morgan Stanley are serving as joint book-running managers,while The Williams Capital Group LP is serving as co-manager.