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Butterfield Bank Issues US$150 million of Subordinated Capital Notes
Hamilton, Bermuda: 27 June 2005 - The Bank of N.T. Butterfield & Son Limited announced today that it had issued US$150 million of Subordinated Lower Tier II Capital Notes. The Notes were issued in two tranches, namely US$90 million in Series A Notes due 2015 and US$60 million in Series B notes due 2020.
The Notes issued under Series A will pay a fixed coupon of 4.81% until 2 July 2010, when they will become redeemable in whole at the option of Butterfield Bank. The Series B Notes will pay a fixed coupon of 5.11% until 2 July 2015 when they will also become redeemable in whole at the Bank's option. The Series A Notes were priced at a spread of 1.00% over the 5-year U.S. Treasury yield and the Series B Notes were priced at a spread of 1.10% over the 10-year U.S. Treasury yield. The exclusive placement agent for the transaction was Lehman Brothers. The Notes have been rated A- by Fitch, Baa1 by Moody's and BBB+ by Standard & Poor's.
The issuance was by way of private placement with U.S. institutional investors. No application has been or will be made to list the Notes in the U.S.. The Notes will be listed on The Bermuda Stock Exchange in the specialist debt securities category.
Commenting on the transaction Richard Ferrett, Executive Vice President & Chief Financial Officer said: "We are extremely pleased with this transaction, our second in the U.S. private placement market. We believe its success is a reflection of investor long-term confidence in Butterfield Bank. The proceeds of the issue will be used for general corporate purposes."