Pacific Western Bank Announces Pricing of $400 Million Subordinated Debt Offering

Rhea-AI Summary

Pacific Western Bank, a subsidiary of PacWest Bancorp (PACW), has announced the pricing of $400 million in 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031. The Notes will initially pay 3.25% interest until May 2026, followed by a floating rate linked to three-month term SOFR. Intended to qualify as Tier 2 capital, proceeds will support growth and capital adequacy. The offering closes on April 30, 2021. Piper Sandler & Co. is the bookrunner for this offering, which is aimed at institutional accredited investors.

Positive

• Successful pricing of $400 million subordinated notes.
• Initial fixed interest rate of 3.25%, enhancing attractiveness.
• Proceeds will be used for corporate purposes and growth.

Negative

• Notes are not insured by the FDIC, representing risk for investors.
• Future interest payments are contingent on benchmark rates.

LOS ANGELES, April 28, 2021 (GLOBE NEWSWIRE) -- Pacific Western Bank (the “Bank”), the wholly-owned banking subsidiary of PacWest Bancorp (Nasdaq: PACW), announced today the pricing of $400 million aggregate principal amount of its 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 (the “Notes”). The Notes have an initial fixed interest rate of 3.25%, payable semi-annually in arrears. From and including May 1, 2026, the Notes will bear interest at a floating rate per annum equal to a benchmark rate, which is expected to be three-month term SOFR plus 252 basis points for each quarterly interest period during the floating rate period, payable quarterly in arrears.

The Notes are intended to qualify as Tier 2 capital for regulatory purposes. The offering is expected to close on April 30, 2021, subject to the satisfaction of customary closing conditions. The Bank intends to use the net proceeds of the offering for general corporate purposes, including to provide capital to support growth and the capital adequacy of the Bank. The Bank may redeem the Notes in whole or in part, beginning on May 1, 2026, and on every interest payment date thereafter, at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to but excluding the date of redemption. The Notes were issued at a price of 100% of their face amount.

Piper Sandler & Co. acted as bookrunner in the Notes offering.

This press release is for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy, any security, nor shall there be any sale of the Notes in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are being offered and sold only to institutional accredited investors within the meaning of the Securities Act in reliance on the exemption contained in Section 3(a)(2) of the Securities Act. The indebtedness evidenced by the Notes is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund.

ABOUT PACWEST BANCORP

PacWest Bancorp (“PacWest”) is a bank holding company with over $32 billion in assets headquartered in Los Angeles, California, with an executive office in Denver, Colorado, with one wholly-owned banking subsidiary, Pacific Western Bank (the “Bank”). The Bank has 70 full-service branches located in California, one branch located in Durham, North Carolina, and one branch located in Denver, Colorado. The Bank provides community banking products including lending and comprehensive deposit and treasury management services to small and medium-sized businesses conducted primarily through our California-based branch offices and Denver, Colorado branch office. The Bank offers national lending products including asset-based, equipment, and real estate loans and treasury management services to established middle-market businesses on a national basis. The Bank also offers venture banking products including a comprehensive suite of financial services focused on entrepreneurial and venture-backed businesses and their venture capital and private equity investors, with offices located in key innovative hubs across the United States. For more information about PacWest Bancorp or Pacific Western Bank, visit www.pacwest.com.

CONTACTS

Matthew P. Wagner President and CEO 303.802.8900

Bart R. Olson Executive Vice President and CFO 714.989.4149

William J. Black Executive Vice President Strategy and Corporate Development 919.597.7466

 

FAQ

What are the details of the subordinated notes offered by PACW?

PACW is offering $400 million in 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031.

When will the offering for PACW's subordinated notes close?

The offering is expected to close on April 30, 2021.

What will PACW use the proceeds from the subordinated notes for?

The proceeds will support corporate purposes and enhance capital adequacy.

Are the subordinated notes offered by PACW insured?

No, the notes are not insured by the FDIC or any other government agency.

What is the initial interest rate for PACW's subordinated notes?

The initial interest rate is set at 3.25%.