MB FINANCIAL,INC. (NASDAQ:MBFI) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement
On November14, 2017, MB Financial Bank, National Association (the “Bank”), a wholly owned subsidiary of MB Financial,Inc., entered into a purchase agreement (the “Purchase Agreement”) with Sandler O’Neill& Partners, L.P., for itself and as representative of the other initial purchasers named in Schedule A thereto (collectively, the “Initial Purchasers”), relating to the underwritten offering by the Bank (the “Offering”) of $175,000,000 aggregate principal amount of the Bank’s 4.00% Fixed-to-Floating Rate Subordinated Notes due 2027 (the “Subordinated Notes”). The Bank estimates that the net proceeds from the Offering will be approximately $172.8 million, after deducting the Initial Purchasers’ discounts and estimated expenses of the Offering. The Bank intends to use the net proceeds of the Offering for general corporate purposes. The Offering was completed on November16, 2017.
The Purchase Agreement contains customary representations, warranties and covenants between the parties as of the date of entering into the Purchase Agreement. These representations, warranties and covenants are not representations of factual information to investors about the Bank, and the sale of any Subordinated Notes to the Purchase Agreement is not a representation that there has not been any change in the condition of the Bank. A copy of the Purchase Agreement is attached hereto as Exhibit1.1 hereto and is incorporated herein by reference.
The Subordinated Notes were issued under a Paying Agency Agreement, dated as of November16, 2017, between the Bank and U.S. Bank National Association, as paying agent, calculation agent, DTC custodian and note registrar, a copy of which is attached hereto as Exhibit4.1 and is incorporated herein by reference.
The Subordinated Notes will initially bear interest at a fixed rate of 4.00% per annum, payable semi-annually in arrears, commencing on June1, 2018, to, but excluding, December1, 2022, and, thereafter, quarterly in arrears, at an annual floating rate equal to the then current three-month LIBOR plus 187.3 basis points. The Subordinated Notes will mature on December1, 2027.
The Subordinated Notes are redeemable at par at the Bank’s option, in whole or in part, subject to obtaining any required regulatory approval, on December1, 2022 and on any scheduled interest payment date thereafter. The Subordinated Notes also are redeemable by the Bank at par, in whole but not in part, at any time prior to that date, subject to obtaining any required regulatory approval, in the case of certain special events that could prevent the Bank from deducting interest paid on the Subordinated Notes for U.S. Federal income tax purposes, that would result in the Subordinated Notes no longer constituting tier 2 capital for regulatory capital purposes or that would require the Bank to register as an investment company under the Investment Company Act of 1940, as amended.
The Subordinated Notes are unsecured, subordinated obligations of the Bank and: (i)rank junior in right of payment and upon the Bank’s liquidation to all of its existing and future senior indebtedness, whether secured or unsecured, including claims of depositors and general creditors; (ii)rank equally in right of payment with any unsecured, subordinated indebtedness that the Bank incurs in the future that ranks equally with the Subordinated Notes; (iii)rank senior in right of payment to any indebtedness the terms of which provide that such indebtedness ranks junior to the Subordinated Notes; and (iv)are structurally subordinated to all existing and future indebtedness and liabilities of the Bank’s existing and future subsidiaries.
