UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 1, 2010
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STERLING FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Washington 0-20800 91-1572822
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
111 North Wall Street, Spokane, Washington 99201
(Address of principal executive offices) (Zip Code)
(509) 458-3711
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
INFORMATION TO BE INCLUDED IN THE REPORT
Item 8.01. Other Events.
(a) Sterling Financial Corporation ("Sterling") expects to commence cash
offers to purchase, and consent solicitations relating to, the ten series of
outstanding trust preferred securities ("TruPS") having an aggregate principal
amount of $238,000,000 listed below (the "Offers"):
Offer to
Purchase Price
per $1,000 Aggregate
Principal Amount of Principal Purchase
Name of TruPS Outstanding Amount Price
---------------------------------- ---------------- -------------- ------------
Sterling Capital Trust VII $ 55,000,000 $ 200 $ 11,000,000
Sterling Capital Trust VIII 50,000,000 200 10,000,000
Sterling Capital Trust IX 45,000,000 200 9,000,000
Sterling Capital Statutory Trust V 20,000,000 200 4,000,000
Klamath First Capital Trust I 15,000,000 200 3,000,000
Sterling Capital Trust III 14,000,000 200 2,800,000
Lynwood Capital Trust II 10,000,000 200 2,000,000
Sterling Capital Trust VI 10,000,000 200 2,000,000
Sterling Capital Trust IV 10,000,000 200 2,000,000
Lynwood Capital Trust I 9,000,000 200 1,800,000
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Total $ 238,000,000 $ 47,600,000
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The registered owners of all of the TruPS (the "Holders") are either
managed or un-managed "static" collateralized debt obligation vehicles ("CDOs").
The terms and conditions of the Offers will be the same for all Holders. Each of
the Offers will be conditioned on receipt of consent of the relevant Holders
sufficient to approve proposed amendments to the applicable indenture governing
the note underlying the relevant series of TruPS, the applicable trust agreement
of the applicable issuing trust and the related guarantee to remove or waive the
covenant that prohibits Sterling from purchasing any other series of TruPS while
the subject series of TruPS is in deferral. In the case of TruPS held by
un-managed CDOs, Sterling expects that acceptance of the Offer and approval of
the related amendments will require the consent of the securityholders of the
CDO. Based on information currently available to it, Sterling believes that the
TruPS are held by the following CDOs:
Issuer Co-Issuer / Second Tier Issuer
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(if applicable)
ALESCO Preferred Funding I, Ltd. ALESCO Preferred Funding I, Inc.
ALESCO Preferred Funding XIII, Ltd. ALESCO Preferred Funding XIII, Inc.
ALESCO Preferred Funding XIV, Ltd. ALESCO Preferred Funding XIV, Inc.
ALESCO Preferred Funding XIV (L2), Ltd.
(Second Tier Issuer)
ALESCO Preferred Funding XVI, Ltd. ALESCO Preferred Funding XVI, LLC
ALESCO Preferred Funding XVI (L2), Ltd.
(Second Tier Issuer)
MMCapS Funding XVIII, Ltd. MMCapS Funding XVIII, Corp.
MMCapS Funding XIX, Ltd. MMCapS Funding XIX Corp.
MM Community Funding Ltd. MM Community Funding Corp.
MM Community Funding IX, Ltd. MM Community Funding IX Corp.
Preferred Term Securities IX, Ltd. Preferred Term Securities IX, Inc.
Preferred Term Securities X, Ltd. Preferred Term Securities X, Inc.
Preferred Term Securities XI, Ltd. Preferred Term Securities XI, Inc.
Preferred Term Securities XVIII, Ltd. Preferred Term Securities XVIII, Inc.
Preferred Term Securities XXII, Ltd. Preferred Term Securities XXII, Inc.
Preferred Term Securities XXIII, Ltd. Preferred Term Securities XXIII, Inc.
Preferred Term Securities XXV, Ltd. Preferred Term Securities XXV, Inc.
Trapeza CDO III, LLC Not applicable
Trapeza CDO IV, LLC Not applicable
Trapeza CDO XI, Ltd. Trapeza CDO XI, Inc.
Trapeza CDO XII, Ltd. Trapeza CDO XII, Inc.
Trapeza CDO XIII, Ltd. Trapeza CDO XIII, Inc.
U.S. Capital Funding V, Ltd. U.S. Capital Funding V, Corp.
Consummation of each Offer will also be conditioned upon Sterling's receipt
of net proceeds from an equity offering, sale of assets or other transaction (a
"Financing Transaction") sufficient to purchase the TruPS that are validly
tendered and not withdrawn (the "Financing Condition") and the approval, to the
extent required, by banking regulators of (i) Sterling's payment of the purchase
price for the TruPS that are validly tendered and not withdrawn and (ii) the
Financing Transaction. Sterling may waive any condition to any Offer and may
extend the expiration time of any offer once made. There can be no assurance
that any Holders will accept the Offer or approve the related amendments or that
the conditions to the consummation of the Offers will be met if any Offers are
accepted.
Each of the Offers is a separate offer and consent solicitation,
independent from the other Offers. If any of the Offers are not accepted,
Sterling may, subject to certain conditions, proceed to consummate the Offers
that are accepted or may determine not to consummate any of the Offers. If some
Holders accept the Offer but the amendments described above are not approved
with respect to one or more series of TruPS, then subject to approval by banking
regulators, Sterling may be required to pay the accrued interest due under the
indentures underlying those series of TruPS in order to address restrictions on
repurchases during interest deferral periods. Subject to Sterling's election to
do so, Sterling currently intends thereafter to resume deferring interest
payments associated with such indentures beginning on the next interest payment
date. Sterling expects TBC Securities, LLC to act as its dealer manager with
regard to the tender offers.
Sterling is exploring a variety of options for raising the funds necessary
to satisfy the Financing Condition. However, there is no assurance that the
Financing Condition will be satisfied. Sterling's ability to consummate a
Financing Transaction, as well as the timing of any such transaction, is highly
uncertain.
This filing is for informational purposes only and is not an offer to
purchase, a solicitation of an offer to purchase or a solicitation of consent
with respect to any securities. The offers to purchase and consent solicitations
are being made solely pursuant to the Letter of Transmittal and Consent, which
set forth the complete terms of the offers to purchase and consent
solicitations.
Forward-Looking Statements
This filing contains certain "forward-looking" statements relating to the
Offers and to a Financing Transaction. These forward-looking statements are
subject to various risks and uncertainties, many of which are beyond the control
of Sterling, which could cause actual results to differ materially from such
statements. Such risks and uncertainties include, but are not limited to,
Sterling's ability to complete a Financing Transaction on favorable terms, if at
all, the receipt of consents and tenders from Holders of the TruPS sufficient to
approve the proposed amendments to the applicable indenture governing the note
underlying the relevant series of TruPS and such other factors as are described
in greater detail in Sterling's filings with the Securities and Exchange
Commission, including, without limitation, Item 1A. Risk Factors of Sterling's
Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and of
Sterling's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009,
June 30, 2009 and September 30, 2009. Unless legally required, Sterling
disclaims any obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise.
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STERLING FINANCIAL CORPORATION
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(Registrant)
February 1, 2010 By: /s/ Daniel G. Byrne
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Date Daniel G. Byrne
Executive Vice President, Assistant Secretary
and Principal Financial Officer