| Item 1.01 | Entry into a Material Definitive Agreement. |
On September 17, 2020, UMB Financial Corporation (the “Company”) completed the previously announced public offering (the “Offering”) of $200,000,000 million aggregate principal amount of the Company’s 3.700% Fixed-to-Fixed Rate Subordinated Notes due 2030 (the “Notes”).
The Notes were offered and sold pursuant to the Company’s Registration Statement on Form S-3 (Registration No. 333-230787) filed with the Securities and Exchange Commission (the “Commission”) on April 9, 2019, as supplemented by the preliminary prospectus supplement, filed with the Commission on September 14, 2020, pursuant to Rule 424(b)(5) of the Securities Act of 1933, as amended (the “Securities Act”) and the final prospectus supplement, filed with the Commission on September 16, 2020, pursuant to Rule 424(b)(2) of the Securities Act.
The Notes were issued pursuant to an Indenture, dated as of September 17, 2020 (the “Base Indenture”), as supplemented by the Supplemental Indenture, dated as of September 17, 2020 (the “Supplemental Indenture” and together with the Base Indenture, the “Indenture”), in each case, between the Company and Wells Fargo Bank, National Association, as Trustee.
The Notes will mature on September 17, 2030 (the “Maturity Date”). The Notes will bear interest (i) from and including September 17, 2020, to, but excluding, September 17, 2025 (the “Reset Date”) or the date of earlier redemption, at a fixed annual rate of 3.700%, and (ii) from and including the Reset Date to, but excluding, the Maturity Date, at a fixed annual rate equal to the five-year U.S. Treasury rate as of the Reset Date, plus 3.437% per annum. Interest on the Notes will be payable semi-annually in arrears, on March 17 and September 17 of each year, beginning on March 17, 2021.
The Company will have the option to redeem the Notes (i) in whole or in part commencing on the Reset Date, and on any interest payment date thereafter, (ii) in whole or in part at any time during the three month period prior to the Maturity Date, or (iii) in whole, but not in part, upon the occurrence of a “Tax Event” a “Tier 2 Capital Event” or the Company being required to register as an investment company pursuant to the Investment Company Act of 1940. The redemption price for any redemption will be equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon, if any, to, but excluding, the redemption date. Any early redemption of the Notes will be subject to the approval of the Board of Governors of the Federal Reserve System to the extent required under applicable laws or regulations, including regulations governing capital criteria.
There is no sinking fund for the Notes. The Notes are unsecured and will rank junior and be subordinated to all of our existing and future senior indebtedness. The Notes will rank equally with all of our existing and future subordinated indebtedness that is not specifically stated to be junior to the Notes. The Notes will be structurally subordinated to all existing and future liabilities of our subsidiaries.
The foregoing descriptions of the Base Indenture and the Supplemental Indenture do not purport to be complete and are qualified in their entirety by reference to the full text of such documents. For a complete description of the foregoing documents, please refer to the Base Indenture filed as Exhibit 4.1 and the Supplemental Indenture filed as Exhibit 4.2 to this Current Report on Form 8-K and is incorporated herein by reference. The Form of the Notes is filed as Exhibit 4.3 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
In connection with the Offering, Mayer Brown LLP opined on the validity of the Notes. The opinion of Mayer Brown LLP, and its consent, is filed as Exhibit 5.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
