Valley National gets approval from US Treasury to repurchase preferred stock

Thu. September 17, 2009; Posted: 05:03 AM

Sep 17, 2009 (Datamonitor via COMTEX) -- VLY | Quote | Chart | News | PowerRating -- Valley National Bancorp, the holding company for Valley National Bank, has received approval from the US Department of the Treasury for its request to redeem 125,000 out of the 225,000 shares of the company's series A preferred stock outstanding and held by the Treasury under the capital purchase program.

Valley expects to pay approximately $125.7 million to the Treasury to repurchase the preferred stock (including accrued and unpaid dividends) on September 23, 2009. Valley's redemption of the shares is not subject to additional conditions or stipulations from the Treasury.

Including Valley's repurchase of 75,000 shares in June 2009, it will have repaid $200 million of $300 million in senior preferred shares issued to the Treasury under the capital purchase program (CPP) during November 2008.

Valley's management believes that the company is well-positioned to withstand current and future economic challenges. Nevertheless, Valley's management and board of directors continue to implement an incremental repayment approach to the CPP funds, rather than a full repayment, adopting a cautious strategy based upon the current economic climate, the company said.

After the September 2009 repayment, Valley anticipates that it will have adequate cash available for potential future repayments of the remaining $100 million in senior preferred shares.

In connection with the November 2008 issuance of the preferred stock, Valley issued to the Treasury a warrant to purchase approximately 2.4 million shares at $18.66 per share (adjusted for a 5% common stock dividend issued in May 2009). This warrant is still held by the Treasury and remains outstanding.

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For full details on Valley National Bancorp (VLY) click here. Valley National Bancorp (VLY) has Short Term PowerRatings of 8. Details on Valley National Bancorp (VLY) Short Term PowerRatings is available at This Link.

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