Issuance of Notes for Capital Generation at Nexbank
The survival and existence of financial services companies are normally based on the presence of adequate capital or monetary resources to support all operations. To raise the funds, various methods are used, including the issuance of notes. NexBank Capital, Inc., a company specializing in financial services, outsourced the services of Sandler O’Neill & Partners, L.P. to help as a sole placement agent for the notes that were being offered in private. This means that the general public was not involved and only high net worth investors and specific institutions were invited for the offer.
Following a successful process, NexBank announced that the entire process was a success having made a deal worth $54 million in the placement. Although there are different types of notes that can be used, NexBank Capital opted to place fixed-to-floating rate subordinated notes. The two-diversified fixed and floating notes comprise of a five-year fixed rate of 6.375% interest after which they are automatically supposed to shift to floating rate that will be based on a spread higher than the then current three-month London Interbank Offered Rate of 458.5 basis points. After an assessment by Kroll Bond Rating Agency, the notes were assigned a good investment grade rating of BBB.
NexBank has its headquarters in Dallas, and it stands out as one of the largest financial institutions in the state of Texas as it assumes the 11th position. Nationwide, it is ranked as the 161st largest bank. Today, it stands firm on its strong foundation and experience in the industry since its establishment in 1934. Based on the statistics of September 2017, it had become a large employer with 87 employees based at three locations including Mckinney Avenue, Suite 1700, Mckinney Avenue, Suite 1100, and one on Luther Lane.
Having an excellent A health rating, Nedbank’s money market rates are ideal since they are generally 3 times higher than the national average. Based on September 2017 statistics, Nexbank had accumulated assets totaling to over $ 7 billion dollars, and the total deposits were close to the $ 7 billion dollars mark. Supervision by the FDCI helps it offer ideal services in mortgage and commercial banking.