April 26, 2010 / 9:01 PM / in 7 years

UPDATE 2-Synovus unveils $630 mln capital plan; stock dips

* To issue $400 mln shares

* To offer $200 mln tangible equity units

* To exchange shares for notes

* Stock dips 7 pct in after-hours trade (Adds details, background; updates stock move)

BANGALORE, April 26 (Reuters) - Synovus Financial Corp (SNV.N) will raise $630 million through offerings of shares and equity units, as well as a common stock exchange program, easing uncertainties about the company’s blueprint to tackle capital shortfalls.

The troubled lender will offer $400 million of common stock, and will also offer $200 million of tangible equity units, it said in a statement.

Synovus also plans to offer to exchange up to 97 million shares of common stock for any and all outstanding 5.125 percent subordinated notes due 2017.

Saddled with close to a billion dollars in bailout money that eventually must be repaid and with assets in some of the worst markets in the country, Synovus has been under pressure to raise capital soon.

Synovus, which has more than $32 billion in assets, holds many commercial real estate and construction loans in some of the worst markets in the country, making credit quality a major concern.

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For a related graphic: link.reuters.com/cem78j

For Q1 earnings story, double click [ID:nSGE63J0MK]

For analysis on Synovus’ capital plans [ID:nSGE63K0IJ]

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The new initiatives will add $630 million to the company’s Tier 1 common equity, and will raise its Tier 1 common equity ratio to 8.5 percent, Synovus said in a statement.

The company also expects to repay the bailout funds with improvement in credit metrics following the capital raise.

Last week, Synovus posted a net loss available to common shareholders of $229.8 million, or 47 cents a share, compared with a loss of $150.9 million, or 46 cents a share, a year earlier.

Synovus also adopted a shareholder rights plan to preserve tax assets and declared a dividend of one preferred stock purchase right for each outstanding share common stock.

Shares of the Columbus, Georgia-based bank fell 7 percent to $3.19 in after-hours trade. They closed at $3.44 Monday on the New York Stock Exchange. (Reporting by Anurag Kotoky in Bangalore; Editing by Ratul Ray Chaudhuri)

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