Holland & Knight Represents Underwriters in $150 Million Subordinated Debt Offering by Preferred Bank
DENVER (June 21, 2021) – Holland & Knight advised Piper Sandler & Co., as the bookrunner, and Raymond James & Associates, Inc., Stephens Inc. and B. Riley Securities, Inc. as co-managers, in the offering of $150 million aggregate principal amount of 3.375% fixed-to-floating rate subordinated notes due 2031 by Preferred Bank (Nasdaq: PFBC). The offering closed on June 15.
Interest on the notes will accrue at a rate equal to (i) 3.375% per annum from the original issue date to, but excluding, June 15, 2026, payable semiannually in arrears, and (ii) a floating rate per annum equal to a benchmark rate, which is expected to be three-month term SOFR (as defined in the notes), plus a spread of 278 basis points from, and including, June 15, 2026, payable quarterly in arrears. The notes are intended to qualify as Tier 2 capital for regulatory purposes.
Preferred Bank is one of the larger independent commercial banks headquartered in California. It expects to use the net proceeds from the offering to redeem $100 million of its 2016 fixed-to-floating rate subordinated debentures, plus accrued but unpaid interest thereon, and for general corporate purposes, which may include funding loans or purchasing investment securities for its portfolio, among other things.
Holland & Knight Partners Mark Goldschmidt and Kevin Houlihan and Associates Amelia Occhino and Alexander Weaver led the firm's representation of Piper Sandler & Co. in the transaction.
More information about the transaction can be found here.