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Cascade Bancorp works out deal to raise $177M

Cascade Bancorp wrapped up a deal with a group of investors that will bring in $177 million, a move that should halt the company’s capital problems.

The Bend, Ore., bank holding company, parent of Bank of the Cascades, finalized agreements to raise the money through sales of common stock.

The company originallysigned an agreement in October 2009 with investors David F. Bolger and Lightyear Fund II LP for the purchase of $65 million shares of common stock. It was conditioned on the sale of a total of $150 million worth of common stock.

The agreement was extended nine times while Cascade sought other investors.

The deal announced Nov. 16 brings private equity firms affiliated with Leonard Green & Partners LP and WL Ross & Co. LLC into the mix. It will give Lightyear, Leonard Green and WL Ross each 24.35 percent of the company’s common stock, while Bolger will get 14.01 percent. The purchase price will be 40 cents per share.

A 1-for-10 reverse stock split, effective Nov. 22, will mean that every 10 shares of the company’s common stock will be converted to one share. Total shares will be reduced from about 28.5 million to 2.85 million.

Other shareholders will receive cash in exchange for their shares.

The company said Bank of the Cascades would now exceed the 10 percent leverage ratio required by regulators.

Bank of the Cascades operates 32 branches in Oregon and Idaho.


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