Avidbank Holdings said it completed a private placement of fixed-to-floating rate subordinated notes totaling $30 million.
The San Jose, California-based bank plans to use net proceeds to repurchase or redeem $22 million of outstanding callable subordinated notes and for general corporate purposes. The notes mature on September 1, 2036.
For the first five years, the notes carry a fixed interest rate of 7.00% per annum. After that period, the rate converts to a floating rate, reset quarterly at the three-month Secured Overnight Financing Rate plus 291 basis points.
Avidbank may redeem the notes without penalty starting September 1, 2031, or on any subsequent interest payment date, or earlier under specified events. The debt is intended to qualify as Tier 2 capital for regulatory purposes.
The notes were issued in a private placement and are not registered under the Securities Act of 1933 or state securities laws. The debt does not constitute a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency.
Piper Sandler & Co. served as the exclusive placement agent, while Manatt, Phelps & Phillips advised Avidbank and Davis Polk Wardwell advised Piper Sandler.
