First Business Financial Services, Inc. (NASDAQ:FBIZ) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a RegistrantItem 2.03.
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On June 15, 2017, First Business Financial Services, Inc. (the “Company”) sold and issued $9.1 million in aggregate principal amount of subordinated debentures (the “New Debentures”) to certain accredited investors, all of whom are holders of the Company’s existing 7.50% Subordinated Debentures, due January 15, 2022 (the “Existing Debentures”). The Company will use the net proceeds from the sale of the New Debentures to repay $7.926 million of its existing $22.5 million of subordinated debt, including the Existing Debentures. The remaining net proceeds will be used to increase the capital position of the Company or for other general corporate purposes.
The New Debentures, which have been structured to qualify as Tier 2 capital of the Company, mature on April 15, 2027 and will bear interest at a fixed rate of 6.0% per annum for their entire term. The Company may, at its option, redeem the New Debentures, in whole or part, at any time after the fifth anniversary of issuance, at a price equal to 50% of the outstanding principal amount of such New Debentures redeemed plus accrued but unpaid interest to, but excluding, the redemption date, subject to any required prior approval of the Board of Governors of the Federal Reserve System. Except upon acceleration as noted below, the New Debentures are not subject to repayment at the option of the holders.
Payment of principal and accrued interest on the New Debentures may be accelerated by a holder of the New Debentures only upon the Company’s bankruptcy (liquidation or reorganization) or the receivership of its wholly-owned bank subsidiary, First Business Bank. There is no right of acceleration in the case of default in the payment of interest on the New Debentures or the performance of any of the Company’s other obligations under the New Debentures.
The New Debentures were offered and sold in reliance on the exemptions from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D thereunder. Accordingly, the New Debentures were offered and sold exclusively to persons who are “accredited investors” within the meaning of Rule 501(a) of Regulation D.
This description of the New Debentures does not purport to be complete and is qualified in its entirety by reference to the form of 6.0% Subordinated Debenture which is attached as Exhibit 4.1 hereto and is incorporated herein by reference.
Item 9.01.
Financial Statements and Exhibits.
(a)
Not applicable
(b)
Not applicable
(c)
Not applicable
(d)
Exhibits
(4.1)
Form of 6.0% Subordinated Debenture
