“The company expects to realize cash savings from lower funding costs as a result of the redemption,” the lender said Tuesday in a statement. The securities, which pay holders 7% to 7.28%, will no longer count toward the bank’s regulatory capital starting next year, the bank said.
Bloomberg News reports that Trust preferred securities are equity instruments that pay interest like bonds. Banks favoured issuing them during the financial crisis because they’re treated like equity, and not debt, for regulatory purposes.
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