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Union seals $150M raise

Michael Schwartz December 6, 2016 0

The former Union branch inside the Martin's store at Staples Mills Road. (Michael Schwartz)

The former Union branch inside the Martin’s store at Staples Mills Road. (Michael Schwartz)

A local bank is feeling extra flush after successfully completing its first capital raise since 2009.

The parent of Union Bank & Trust added nearly $150 million to its coffers in a public debt offering finalized Monday.

Proceeds of the raise were $148M, after expenses. It hired investment banking firm Sandler O’Neill + Partners to handle the offering.

Purchasers of the notes were large investors such as insurance companies and large money managers.

Union initially disclosed the offering last week, seeking between $100 million and $125 million.

Respective outgoing and incoming CEOs Billy Beale and John Asbury said last week the money raised by parent company Union Bankshares will be passed down to the bank as equity for its “capital stack.”

Union said the money from the offering will be used to pay down existing credit, to add to the bank’s capital levels and grow its loan portfolio.

They said they chose a debt offering as it doesn’t dilute existing shareholders and is considered a cheap form of raising capital. The interest rate paid on the notes is 5 percent per year.

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