Cases & Deals

Comerica issues $2.25 billion of Fixed Rate Cumulative Perpetual Preferred Stock to U.S. Dept. of Treasury under TARP

Clients Comerica Incorporated

Jones Day represented Comerica Incorporated in connection with the $2.25 billion of Fixed Rate Cumulative Perpetual Preferred Stock, Series F without par value issued to the U.S. Department of Treasury in connection with the Troubled Assets Relief Program (TARP).

The preferred securities pay cumulative dividends of 5 percent a year for the first five years and 9 percent a year thereafter. After three years, Comerica may, at its option, redeem the preferred securities at par value plus accrued and unpaid dividends. Comerica can only redeem the preferred securities during the first three years after issuance with the proceeds from a "qualified equity offering."

As part of its purchase of the preferred securities, Treasury also received warrants to purchase 11,479,592 shares of Comerica's common stock at an initial per share exercise price of $29.40. The warrants expire 10 years from the issuance date. Both the preferred securities and warrants will be accounted for as components of Comerica's regulatory Tier 1 capital.

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