Huntington Preferred Capital, Inc. Authorizes Redemption of Series C Preferred Stock and Declares Quarterly Cash Dividend
November 07 2013 - 4:30PM
Business Wire
Today, the Board of Directors of Huntington Preferred Capital,
Inc. (HPCI), a subsidiary of The Huntington National Bank (the
Bank), declared a quarterly dividend of $0.4921875 per share on its
Class C preferred stock (NASDAQ: HPCCP). The dividend is payable
December 31, 2013, to shareholders of record on November 20,
2013.
The HPCI Board also approved the redemption effective on
December 31, 2013 (the Redemption Date), of all of the 2,000,000
outstanding shares of 7.875% Noncumulative Series C Preferred Stock
of HPCI. On the Redemption Date, holders of such securities will be
entitled to receive the redemption price of $25.00 per share for
Class C preferred securities. The redemption price may differ from
the market price of the Class C preferred securities on or prior to
the Redemption Date.
As previously disclosed, our Amended and Restated Articles of
Incorporation (Articles) provide that, at any time following the
occurrence of certain special events, we have the right to redeem
all outstanding Class C preferred securities at a redemption price
of $25.00 per share plus accrued dividends for the then-current
dividend period, without interest. The occurrence of such an event
will not, however, give a preferred shareholder any right to
request that such Class C preferred securities be redeemed.
The special event that allows us to redeem the Class C preferred
securities is a regulatory capital event. A regulatory capital
event is defined in our Articles as our determination, based on an
opinion of counsel experienced in such matters, that as a result of
certain changes in the applicable laws, regulations, or related
interpretations, there is a significant risk that our Class C
preferred securities will no longer constitute Tier 1 capital of
the Bank, other than as a result of limitations on the portion of
Tier 1 capital that may consist of minority interests in
subsidiaries of the Bank.
On July 2, 2013, the Federal Reserve Board voted to adopt final
Basel III capital rules for U.S. Banking organizations. The final
rules establish an integrated regulatory capital framework that
will implement, in the United States, the Basel III regulatory
capital reforms from the Basel Committee on Banking Supervision and
certain changes required by the Dodd-Frank Act.
Based on our review of the final rules and an opinion of Porter,
Wright, Morris & Arthur LLP, dated November 6, 2013, we have
determined that there is a significant risk that our Class C
preferred securities will no longer constitute Tier 1 capital for
the Bank for purposes of the capital adequacy guidelines or
policies of the OCC, when Basel III becomes effective for
Huntington Bancshares Incorporated and its affiliates. As a result,
a regulatory capital event has occurred. All required regulatory
approvals have been received.
Following the Redemption Date, HPCI will not declare or pay any
future quarterly dividends with respect to the Class C preferred
securities, the Class C preferred securities will cease to be
outstanding, and the former holders of Class C preferred securities
will have no rights with respect to their ownership of such Class C
preferred securities other than the right to receive the redemption
price. The redemption price will not include the regular quarterly
dividend that was declared today as that dividend will have been
paid immediately prior to the redemption of the Class C preferred
securities.
Huntington Preferred Capital, Inc. is an Ohio corporation
designated as a real estate investment trust that acquires, holds,
and manages mortgage assets and other authorized investments.
Huntington Preferred Capital, Inc.Todd Beekman,
614-480-3878todd.beekman@huntington.comorMark Muth,
614-480-4720mark.muth@huntington.comorMaureen Brown,
614-480-5512maureen.brown@huntington.com
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