Westcorp Sales on Wall Street Called Success : Transactions: Thrift subsidiary will move into well-capitalized category. Also, parent firm’s shares will begin trading on NYSE.
Westcorp Inc. and its thrift subsidiary, Western Financial Savings Bank, said Wednesday that they have raised $157 million through recent stock and bond issues and that nearly all the money will be put into the savings and loan.
The company said that $150 million in proceeds from the transactions will be added to Western Financial’s already solid level of capital--its cushion against losses.
In addition, Westcorp shares will begin trading today on the New York Stock Exchange. The stock had been listed on the American Stock Exchange.
Stephen W. Prough, the company’s president, said the amount of money being transferred to Western Financial will move its capital position from adequately capitalized to well-capitalized, regulators’ highest category.
Westcorp sold 3.7 million shares of common stock at $8.625 apiece, raising $32 million and increasing the number of common shares outstanding to 21.3 million. It will give the thrift $25 million from the proceeds and keep the rest.
At the same time, Western Financial sold $125 million in debt securities, essentially thrift IOUs, that yield interest at 8.625% and are due in 10 years.
Prough attributed the success of the sales on Wall Street to the public’s confidence in Westcorp.
Western Financial has been operating for 13 months under a supervisory agreement with federal regulators, who want certain internal systems improved, bad loans reduced and more capital raised. Prough said the thrift complies now with most of those points, but executives have not discussed yet whether it will ask regulators to terminate the agreement.
Western Financial, with $2.3 billion in loans and other assets, operates 27 branches, 13 mortgage offices, seven automobile finance centers and seven home improvement loan outlets across California. The parent company also owns Westcorp Financial Services, a consumer finance subsidiary with 28 offices in California and two in Oregon.
