Peoples Financial Services Corp. announced the completion of a private placement of $85.0 million in aggregate principal amount of 7.75% Fixed-to-Floating Rate Subordinated Notes due 2035 (the "Notes"). The Company intends to use the proceeds of the private placement for general corporate purposes and the redemption of existing subordinated debt.
The Notes will initially bear interest at a rate of 7.75% per annum from issuance until June 15, 2030, with interest during this period payable semi-annually in arrears beginning December 15, 2025. From June 15, 2030, to the stated maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to Three-Month Term Secured Overnight Financing Rate plus 411 basis points, with interest during this period payable quarterly in arrears beginning September 15, 2030. The Notes are redeemable by the Company, in whole or in part, on or after June 15, 2030, and at any time upon the occurrence of certain events.
The Notes have been structured to qualify as Tier 2 capital for the Company for regulatory capital purposes. In connection with the issuance and sale of the Notes, the Company entered into a registration rights agreement with the purchasers of the Notes pursuant to which the Company has agreed to take certain actions to provide for the exchange of the Notes for subordinated notes that are registered under the Securities Act of 1933, as amended, with substantially the same terms as the Notes. Performance Trust Capital Partners, LLC acted as sole placement agent for the Notes offering.
Troutman Pepper Locke LLP served as legal counsel to the Company and Luse Gorman, PC served as legal counsel to the placement agent.
