Regions Fin'l Launches $1.25B Equity Offering

Regions Financial Corp (RF.N), a U.S. southeast regional bank, said on Wednesday it plans to raise $1.25 billion through stock offerings, half of the sum that federal regulators told it to raise to withstand a potentially deep recession.
The public offerings include $1 billion of common stock and $250 million of preferred shares automatically convertible into common stock. Regions also proposed to exchange common stock for some trust preferred securities, at a discount to face value, according to a regulatory filing.
Regions expects to give regulators a capital plan by June 8 that will not require an infusion of further taxpayer money. The Birmingham, Alabama-based lender took $3.5 billion from the federal Troubled Asset Relief Program.
Regions was one of 19 large banks to undergo government "stress tests," and was one of 10 told to raise capital. It said it may plug its remaining shortfall through asset sales, a reduction of deferred tax assets, a swap of subordinated debt and other preferreds, and other means.
The $2.5 billion that Regions needs to raise in accordance with the stress test is roughly two-thirds of the bank's $3.8 billion market value as of Tuesday.
Regions said the trust preferreds eligible for exchange have a 6.625 percent dividend, and would be valued at $700 each, down from an original $1,000, according to a 2007 regulatory filing.
Regions has about $142 billion of assets and 1,900 branches in 16 U.S. states across the South, Midwest and Texas. Its capital shortfall was among the largest identified by the government relative to the bank's size and market value.
Goldman Sachs & Co and JPMorgan are arranging the common stock and convertible offerings