First Merchants prices $100M subordinated notes offering
What's the deal? First Merchants Corporation (Nasdaq: FRME) has priced a $100 million offering of 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036. The Muncie, Indiana-based financial holding company expects to close the registered public offering on or about September 25, 2026.
The terms: The notes carry a fixed 6.750% annual rate through October 1, 2031, then reset quarterly to a floating rate expected to be Three-Month Term SOFR plus 202 basis points. First Merchants can redeem them, in whole or in part, from October 1, 2031, at 100% of principal plus accrued interest.
What's the money for? First Merchants intends to use net proceeds for general corporate purposes, including repurchasing its common shares. The notes are meant to qualify as Tier 2 capital for regulatory purposes.
Who's involved? Piper SandlerDealroom has a profile for this one. Try Dealroom → is the sole book-running manager. Keefe, Bruyette & Woods, A Stifel CompanyDealroom has a profile for this one. Try Dealroom →; Hovde GroupDealroom has a profile for this one. Try Dealroom →; and Brean CapitalDealroom has a profile for this one. Try Dealroom → are serving as co-managers.
The company: First Merchants is a financial holding company that operates one full-service bank charter, First Merchants BankDealroom has a profile for this one. Try Dealroom →, which also runs First Merchants Private Wealth AdvisorsDealroom has a profile for this one. Try Dealroom →.
The signal: By raising subordinated debt as Tier 2 capital, First Merchants strengthens its regulatory footing while freeing up capacity to buy back stock — a move that signals confidence in its balance sheet even as it takes on longer-dated obligations maturing in 2036.
Image credit: danxoneil
