Sovereign to net $1.21B in stock offering

PHILADELPHIA – Sovereign Bancorp Inc. (NYSE: SOV), parent company of Sovereign Bank, said today that it has priced its public offering of 156.25 million shares of common stock at an offering price of $8 per share for net proceeds of $1.21 billion after an underwriting discount and estimated offering expenses.

Sovereign – the No. 3 financial institution in Rhode Island, in terms of deposits – has granted the underwriter a 30-day option to purchase up to an additional 23.44 million shares to cover over-allotments, if any. The offering is expected to close on Friday.

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The shares were issued from the company’s shelf registration statement on file with the U.S. Securities and Exchange Commission, the company said. Sovereign said it intends to use the proceeds of the offering for general corporate purposes. Lehman Brothers Inc. is acting as the sole book-running manager of the offering.

Shares of Sovereign Bancorp were trading at $8.45 in heavy volume shortly after noon today, 27 cents above the previous day’s closing price and well above the offering price.

Sovereign Bank has said it also plans to offer about $500 million of 10-year, fixed-rate subordinated notes. (READ MORE) The bank said it also will be using the proceeds for general corporate purposes. The offering is expected to start once Sovereign receives regulatory approval.

Sovereign Bancorp Inc. (NYSE: SOV), the parent company of Sovereign Bank, is a $90 billion financial institution with nearly 800 community banking offices, more than 2,000 ATMs and about 12,000 employees mostly in the Northeast. For additional information, visit www.sovereignbank.com.