Back to top

Analyst Blog

On Tuesday, Cullen/Frost Bankers, Inc. (CFR - Analyst Report) announced the pricing of a public offering of non-cumulative perpetual preferred stock worth approximately $150 million. The offering is expected to close on Feb 15, 2013, subject to customary closing conditions. The liquidation amount is set to be $25 per share. 

The offering includes 6,000,000 shares of the company’s non-cumulative perpetual preferred stock, Series A, which qualifies as Tier 1 capital and carries a coupon rate of 5.375%. The joint-book running managers for the offering are Morgan Stanley (MS - Analyst Report), Goldman Sachs (GS - Analyst Report) and UBS Investment Bank, a unit of UBS AG (UBS - Analyst Report).
 
The proceeds from the issuance and sale of the preferred stock are expected to be roughly $144.5 million (after subtracting underwriting discount and commissions, as well as the payment of estimated expenses).
 
The company plans to use the proceeds to repurchase its common shares. This is in accordance to the terms of the company’s accelerated share repurchase agreement with Goldman Sachs. Under the terms of the deal, Cullen/Frost will pay $144.0 million to Goldman Sachs on Feb 15, 2013 and will receive common shares in exchange. 
 
A sizeable amount of the shares are anticipated to be delivered on Feb 15, with the remaining amount expected upon completion of the program. However, the total number of shares that Cullen/Frost will obtain and the total amount paid will depend on the volume-weighted daily average price of Cullen/Frost’s common share during the tenure of the repurchase program.
 
Cullen/Frost currently retains a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
THE PANTRY… PTRY 21.02 +2.09%
INTEL CP INTC 35.15 +1.88%
PIPER JAFFR… PJC 54.54 +1.70%