(Includes scrapping of prior stock offering, second-quarter loan
and lease loss provision forecast)
DOW JONES NEWSWIRES
Marshall & Ilsley Corp. (MI) said Thursday that it plans a
$400 million common stock offering, scrapping a previously
announced $350 million effort which was intended to be sold
directly into the market.
Most companies generally hold formal offerings in which all of
the planned sale takes place at the same price. But some companies,
including Bank of America Corp. (BAC), of late have opted instead
to sell directly to investors at the prevailing market price.
SunTrust Bank Inc. (STI) reversed course on how it would sell stock
last week, opting against a direct-to-market sale.
A raft of financial and other companies have been taking
advantage of investors' recent return to the market to either raise
capital for purposes including pay back funding received from the
Treasury's Troubled Asset Relief Program. The Treasury cleared 10
big banks earlier this week to repay a combined $68.3 billion.
M&I, Wisconsin's largest bank, got $1.7 billion in funding
last year from the effort. Its shares were down 4.4% to $6.14 in
recent trading as the $400 million stock sale would represent a
near 25% dilution of current shareholders. The stock is down 55%
this year, though it has more than doubled since hitting a 24-year
low in March.
M&I has struggled with heavy exposure to some of the most
troubled housing markets, and with its large exposures to
commercial construction loans, its credit ratings have suffered as
a result.
The company plans to use the estimated proceeds of $384 million
for general corporate purposes or to give a portion to its units to
use for their corporate purposes. But putting it toward TARP
repayment is also a possibility.
Separately Thursday, M&I said in a filing with the
Securities and Exchange Commission it expects its second-quarter
provision for loan and lease losses to nearly be the same as the
first quarter's $1.33 billion, with net charge-offs little changed
sequentially. The first-quarter rate was 2.67% of average loans and
leases.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com