Nat City Lines Up $6 Billion: Report
National City
(NCC)
on Sunday lined up $6 billion to $7 billion in capital from a group of private investors, according to published reports.
The infusion of cash, which works out to about $5 a share, will allow the Cleveland-based bank, hit hard by its exposure to mortgage losses, to stay afloat. Nat City's stock closed Friday at $8.33. In the past 52 weeks, the stock has traded as low as $6.56 and as high as $38.32.
The deal was approved by the bank's board this evening, according to
The Cleveland Plain Dealer
Web site. The paper reports that New York-based Corsair Capital, a spinoff of
JPMorgan Chase
(JPM) - Get Report
, will serve as the lead investor of a group of more than a dozen others that will altogether own about 50% of National City.
Corsair will end up with a 9.9% stake in the bank, and Corsair Vice Chairman Richard Thornburgh reportedly will take a seat on National City's board of directors.
The
Plain Dealer
also reports that National City will cut its quarterly dividend to a penny a share, down from the 21 cents it lowered the payment to in January from a then-41-cent payout.
The deal, which has yet to be finalized, could be announced Monday, ahead of the bank's earnings release Tuesday.
National City announced April 1 that it had hired Goldman Sachs to serve as an adviser as it reviews its strategic alternatives.
Other companies that reportedly expressed interest in some type of deal with National City were
KeyCorp
(KEY) - Get Report
and
Fifth Third Bancorp
(FITB) - Get Report
,
Wells Fargo
(WFC) - Get Report
and Warburg Pincus.
This article was written by a staff member of TheStreet.com.