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New York Community Bancorp (NYSE:NYCB) closed on Monday its previously announced transactions that provided it with ~$1.05B of equity investment by investors including Steven Mnuchin’s Liberty Strategic Capital, funds managed by Hudson Bay Capital Management, funds managed by Reverence Capital Partners, and others.
Under the agreement, NYCB issued: 76,630,965 shares of common stock at a price of $2.00 per share; 192,062 shares of series B of noncumulative preferred stock at a price of $2,000 per share, which are convertible to 1,000 shares of common stock in event of a transfer by the holder; 256,307 shares of series C noncumulative preferred stock at $2,000 per share, with each share convertible to 1,000 common shares during the occurrence of certain events; and warrants to purchase for $2,500 per share, shares of non-voting series D NVCE preferred stock convertible into 1,000 shares of common stock in certain circumstances.
As a result of the transactions, if all shares are converted into common stock, the company will issue a total of ~525M shares of common stock, and the Investors will own ~39.6% of the company on a fully diluted basis. Additionally, the warrants can be exercised for up to 315M shares of common stock. With the net share settlement feature of the warrant, the actual amount issued will be less than the full 315M shares.
The company also plans to submit to stockholders for their approval amendments to effect at least a one-for-three reverse stock split, to make the bid price more attractive to a broader group of institutional and retail investors; and increase the number of authorized shares of the common stock to at least 1.7B.
New York Community (NYCB) will also ask shareholders to exempt certain investors from the provision that prohibits any person who owns more than 10% of the then-outstanding shares of common stock from voting any such shares in excess of the 10% threshold; and approval of the issuance of common stock in excess of 19.9% of the total voting power of the company’s securities.