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PrivateBancorp issues shares in U.S. Treasury capital purchase programme

The company issued senior preferred stocks and warrants to the Treasury

PrivateBancorp has issued approximately $244 million of its senior preferred stock to the U.S. Department of the Treasury under the capital purchase programme.

The company also issued to the U.S. Treasury warrants to purchase 1.29 million shares of common stock at an exercise price of $28.35 per share and an aggregate market value equal to 15% of the U.S. Treasury’s senior preferred investment.

Larry Richman, president and CEO of PrivateBancorp, said: The purpose of this programme is to help healthy, well-capitalised banks like ours continue to be active lenders in this challenging environment. This additional capital substantially enhances our already well-capitalised status and further strengthens our balance sheet. Since the launch of the strategic growth plan, we have raised $800 million in new regulatory capital, including approximately $244 million from the U.S. Treasury.

The U.S. Treasury’s capital purchase programme is a voluntary programme designed to assist healthy institutions build their capital positions to support the U.S. economy by increasing the flow of financing to the U.S. businesses and consumers. Under the programme, senior preferred stock is issued to the U.S. Department of Treasury. The preferred stock will pay a dividend for the first five years, after which the rate will increase to 9% if the preferred shares are not redeemed by the company.