SunTrust Banks Inc
The Atlanta-based bank said it plans to sell $1.4 billion of common stock, raise $300 million of common equity from selling securities, and raise $250 million of common equity from buying back up to $1 billion of preferred and hybrid securities for cash.
It said it also expects to sell $260 million of common stock under a plan announced May 15 to sell $1.25 billion of stock in an at-the-market offering. SunTrust said it has suspended and expects to terminate the offering.
We are on a clear path to achieve our previously announced capital objectives, Chief Executive James Wells said in a statement. SunTrust hopes to repay the $4.9 billion of aid it took from the Treasury Department's Troubled Asset Relief Program at the appropriate time, he said.
The government last month ordered SunTrust to raise $2.2 billion of equity capital following a stress test of its ability to weather a deep recession. SunTrust on May 15 cut its quarterly dividend to a penny per share from 10 cents, the third reduction in a year, saving about $128 million a year.
Goldman Sachs & Co, Morgan Stanley, Sandler O'Neill & Parnters LP and SunTrust Robinson Humphrey are arranging the stock offering. Goldman is lead manager for the tender offer.
SunTrust shares fell 27 cents to $12.90 in premarket trading.
(Reporting by Jonathan Stempel; editing by John Wallace)