First Interstate BancSystem, Inc. announced the pricing of a public offering of $125 million aggregate principal amount of 7.625% Fixed-to-Floating Rate Subordinated Notes due 2035. The notes are intended to qualify as Tier 2 capital for regulatory purposes, strengthening the company's capital base.
The notes will accrue interest at a fixed rate of 7.625% per annum until June 15, 2030, after which they will convert to a floating rate. The offering is expected to generate net proceeds of approximately $123.1 million after deducting underwriting discounts and commissions.
The company intends to use the net proceeds to redeem its existing 5.25% Fixed-to-Floating Rate Subordinated Notes due 2030 on August 15, 2025, and for general corporate purposes. This refinancing move aims to optimize the company's funding structure and manage interest expenses.
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