Sovereign raises $1.9B in stock, debt

INQUIRER STAFF

Sovereign Bancorp, Philadelphia, has raised $1.9 billion in stock and debt so it can "handle any further deterioration in the economy," said chief executive officer Joseph P. Campanelli, who is based in Boston.

Sovereign issued 179.7 million shares of common stock at $8 a share, for $1.39 billion, exceeding its $1 billion target; and $500 million of fixed-rate 8.75 percent subordinated notes, maturing in 2018.

Sovereign's share value has fallen to 2001 levels as the home lending business has slowed, but the bank is now "well-capitalized" by federal regulatory standards, and will use the money to repay the Federal Home Loan Bank system and other "general" purposes, the bank said.

Company shares were priced at $8.18 in early afternoon trading, up $0.07 from yesterday's close.