The high yield bonds were placed by First Union Capital Markets Corp., the investment banking subsidiary of First Union Corp. and an affiliate of First Union National Bank. J.P. Morgan & Co. and Wheat First Butcher Singer served as co-managers. The offering originally was set at $100 million but increased after significant investor demand.
"We are extremely pleased by how well this transaction was received by investors and with First Union's involvement throughout the process," said Emergent Chairman and CEO Jack Sterling.
The transaction represents the first high-yield bond offering that First Union Capital Markets Corp. has completed for a South Carolina-based company. First Union National Bank has served as Emergent's lead financial institution since its inception six years ago. Chuck Cecil, senior vice president at First Union National Bank and relationship manager for Emergent, worked in conjunction with First Union Corp.'s Specialty Finance Group in Charlotte to initiate the high yield transaction.
"We have a long-standing relationship with Emergent and have provided the company with both traditional and non-traditional banking products and services to help the company grow and continue to meet its capital needs," Cecil said. "Through First Union's comprehensive product and service capabilities, clients can obtain all of their financial solutions from one place."
Jay Braden, managing director and head of High Yield Finance within First Union Capital Markets, said the transaction illustrated tremendous teamwork. "The partnership between the South Carolina Bank and Capital Markets Group resulted in a financial solution that was optimal for our client," Braden said. "This transaction represents another example of how clients at the local level can meet their capital needs through First Union's full investment banking capabilities."
In March 1997, First Union Capital Markets Corp. syndicated a $200 million senior credit facility for Emergent Mortgage Corp., a subsidiary of Emergent Group, Inc.
Emergent predominantly serves non-prime mortgage borrowers who have limited access to credit or who may be considered credit-impaired by conventional lending standards. The company commenced its lending operations in 1991 with the acquisition of Carolina Investors, Inc., a South Carolina non-prime mortgage lender which has been in business since 1963.
Charlotte-based First Union Corp. provides a full range of capital markets products and services, including high-yield and investment-grade finance, asset-backed securities, public finance, leveraged finance, syndicated loans, merger and acquisition advisory and private placements.
First Union has grown its capital markets business substantially over the last three years. In 1996, First Union Capital Markets reported a 75 percent increase in fee income to $464 million from 1995 and a 46 percent increase in pretax net income to $422 million.
First Union is a leading provider of financial products and services to approximately 12 million customers nationwide. First Union is the nation's sixth-largest bank holding company with assets of $143 billion as of June 30, 1997. It operates financial centers in 12 Eastern states, as well as in Washington, D.C.
The Emergent bonds have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States or to U.S. persons absent registration under the Securities Act or an application exemption from the registration requirements thereof. All of the Emergent bonds have been previously sold. This news release does not constitute an offer to sell or the solicitation of an offer to buy any of the Emergent bonds.
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