Zions Sells $300 Million in Preferred Stock

Zions Bancorp. (ZION) in Salt Lake City has raised roughly $301 million by selling preferred stock.

The $54 billion-asset company said Friday that it would use the proceeds for general corporate purposes. The stock will pay a dividend of 5.8% per share until June 15, when the rate will convert to the London interbank offered rate, plus 3.8%.

Underwriters for the offering were Deutsche Bank (DB), Goldman Sachs (GS), Keefe Bruyette & Woods, Macquarie Capital and the company's broker-dealer unit Zions Direct.

The offering is part of a series of capital raises by Zions. In May, the company raised $126 million by selling preferred shares by Zions Direct. It raised $172 million through a similar sale in January.

The price of the latest offering was about 50 basis points more favorable for Zions than the one held in January, says James Abbott, Zions' director of investor relations.

Abbot says the terms reflect investors' recognition of the company's credit quality. "The market is beginning to recognize that Zions is one of the best-positioned banks for when rates begin to rise, and that has a lot of value for shareholders," he says.