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Item 1.01.
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Entry into a Material Definitive Agreement.
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On
September 20, 2019, Midland States Bancorp, Inc. (the “Company”) issued and sold $72.75 million aggregate principal
amount of 5.00% Fixed-to-Floating Rate Subordinated Notes due 2029 (the “2029 Notes”), and $27.25 million aggregate
principal amount of 5.50% Fixed-to-Floating Rate Subordinated Notes due 2034 (the “2034 Notes” and, together with the
2029 Notes, the “Notes”). The Company used a portion of the net proceeds from the offering to repay a $30.0 million
senior term loan and intends use the remaining net proceeds to redeem $40.3 million of existing subordinated debt on or after June
18, 2020, which is the date that the existing subordinated debt becomes redeemable, and for general corporate purposes.
The
2029 Notes mature September 30, 2029 and were issued pursuant to an Indenture, dated as of September 20, 2019 (the “2029
Indenture”), between the Company and UMB Bank National Association, as trustee. The 2029 Notes bear interest at an initial
fixed rate of 5.00% per annum from and including the issuance date to but excluding September 30, 2024. From and including September
30, 2024 to but excluding the maturity date, the 2029 Notes bear interest at a floating rate, reset quarterly. The Company is entitled
to redeem the 2029 Notes, in whole or in part, on any interest payment date on or after September 30, 2024, and to redeem the 2029
Notes in whole upon certain other events.
The
2034 Notes mature September 30, 2034 and were issued pursuant to an Indenture, dated as of September 20, 2019 (the “2034
Indenture”), between the Company and UMB Bank National Association, as trustee. The 2034 Notes bear interest at an initial
fixed rate of 5.50% per annum from and including the issuance date to but excluding September 30, 2029. From and including September
30, 2029 to but excluding the maturity date, the 2034 Notes bear interest at a floating rate, reset quarterly. The Company is entitled
to redeem the 2034 Notes, in whole or in part, on any interest payment date on or after September 30, 2029, and to redeem the 2034
Notes in whole upon certain other events.
The
Notes were sold in a private placement transaction, in reliance upon the exemptions from registration afforded by Section 4(a)(2)
and Rule 506(b) under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the offering,
the Company entered into a Registration Rights Agreement, dated as of September 20, 2019 (the “Registration Rights Agreement”),
with the purchasers, pursuant to which the Company has agreed to conduct an offer to exchange the Notes for substantially identical
subordinated notes in an offering registered under the Securities Act (the “Exchange Offer”). If the Company fails
to comply with certain of its obligations under the Registration Rights Agreement, it will be required to pay additional interest
to the holders of the Notes.
The
Notes are not subject to any sinking fund and are not convertible into or, other than in the Exchange Offer, exchangeable for any
other securities or assets of the Company or any of its subsidiaries. The Notes are not subject to redemption at the option of
the holder. The Notes are unsecured, subordinated obligations of the Company only and are not obligations of, and are not guaranteed
by, any subsidiary of the Company. The Notes rank junior in right to payment to the Company’s current and future senior indebtedness.
The Notes are intended to qualify as Tier 2 capital of the Company for regulatory capital purposes.
The
foregoing summaries of the 2029 Indenture, the 2029 Notes, the 2034 Indenture, the 2034 Notes and the Registration Rights Agreement
are qualified in their entirety by reference to the full text of such agreements, copies or forms of which are filed herewith as
Exhibits 4.1, 4.2., 4 3, 4.4 and 4.5, respectively and are incorporated herein by reference.