* Offering 110 mln common shares at $1/shr
* Offering 13.5 mln convertible preferred shares at $20/shr
* Shares lose half their value
Oct 28 (Reuters) - Flagstar Bancorp Inc (FBC.N) said it priced a common stock offering at $1 a share, a 57 percent discount, wiping out half of the company’s market value.
The loss-making lender, which is selling 110 million common shares, is also offering 13.5 million convertible preferred shares at a purchase price and liquidation preference of $20 per share.
Shares of Troy, Michigan-based Flagstar, which had 153 million shares outstanding as of August, plunged 47 percent to $1.22 in morning trade on the New York Stock Exchange.
The bank, which received $266.7 million in bailout funds, has operations in Michigan, Indiana and Georgia and originates residential mortgage loans throughout the United States, has been badly hit by the fall in U.S. home values and the recession.
Proceeds from the offerings, expected to be about $367.3 million, would be used for general corporate purposes including potential dispositions of non-performing assets, or potential restructuring of the balance sheet.
Earlier this year, Flagstar saw investment from Greenlight Capital, a hedge fund run by investor David Einhorn, which bought 33 million shares in the bank. [ID:nN1799949] (Reporting by Brenton Cordeiro in Bangalore; Editing by Aradhana Aravindan)