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CINCINNATI — Fifth Third Bancorp said Wednesday it will sell no more than $750 million in common stock as part of the company's commitment to add a $1.1 billion infusion after the government's stress test showed the bank needed a buffer to withstand losses.
Fifth Third will sell the shares from time to time through an at-the-market offering through Morgan Stanley and Merrill Lynch & Co.
Some of the proceeds will fund the cash portion of the company's offer to exchange cash and common shares for Series G convertible preferred depositary shares; other proceeds would be used for general corporate purposes.
Fifth Third will offer holders of its $1.1 billion Series G convertible preferred depositary shares, in exchange for tendering their shares, a cash payment of $30 per Series G depositary share, in addition to a conversion of the common shares underlying the Series G preferred shares.
The company estimated that up to 45 percent of the proceeds from the stock offer could be used for the cash portion of the Series G convertible preferred exchange.
Earlier this month, Fifth Third Bancorp said it would add $1.1 billion in the next six months through private market actions that included the potential sale of some non-strategic assets.
Last month, Fifth Third reported a first-quarter loss of $26 million, but results were better than expected. The company has been trying to lessen its risk in hard-hit real estate markets such as Florida and Michigan.
Cincinnati-based Fifth Third Bancorp is a diversified financial services company. As of March 31, the company had $119 billion in assets.
Its shares lost 11 cents to $7.60 in after-hours trading following the announcement of its plans to sell shares. In the regular session, the stock declined 10 cents to close at $7.71.
