Bank of Butterfield Receives $550 Million

March 2, 2010

bank of butterfield money givenOn the heels of a staggering $213.4 million loss for 2009, the Bank of Butterfield has received a $550 million capital infusion.

Investors include The Carlyle Group, Canadian Imperial Bank of Commerce [CIBC], Wellcome Trust, The Bermuda Government Pension Funds, Goshen Investments, LLC and self made billionaire Julian Robertson.

One of the larger investors, CIBC has invested $150 million, as well as provided Butterfield with a commitment letter for a senior secured credit facility for up to US$500 million. They also invested $26 million indirectly in Butterfield through a private equity fund sponsored by The Carlyle Group. CIBC will now own 22.5 per cent of Butterfield’s equity and will nominate two of 12 directors on its board.

The release states that “If the rights offering were to be fully subscribed, the resulting aggregate ownership interest in Butterfield of current shareholders (excluding the new investors) would be approximately 37%. Neither Carlyle nor CIBC will own more than 22.8% of Butterfield.”

Which in summary means that the Bank of Butterfield, Bermuda’s oldest bank, is no longer majority Bermudian owned. Bermuda’s other major bank, the Bank of Bermuda, was bought by British banking giant HSBC in 2004.

Trading of Butterfield shares on the Bermuda Stock Exchange will resume effective 9:00 am tomorrow, after being suspended earlier today.

Butterfield Bank also announced that Bradford Kopp has been appointed President, Director and CEO succeeding Alan Thompson, who has retired from the Bank.

Finance Minister the Hon. Paula Cox lauded the deal saying:

The Ministry is pleased that the commercial resolution was concluded in a manner that considerably strengthens the Bank’s capital base. The $550 million injection of new capital enables the Bank to de-risk its balance sheet and positions it for a reasonably quick return to profitability.

The Carlyle Group and the Canadian Imperial Bank of Commerce (CIBC) are brand names in global financial circles. Their partnership with Butterfield Bank is a positive development for Bermuda’s financial sector and the equity capital commitment represents a long term vote of confidence in our jurisdiction as an international financial centre.

The full press release is below:

Read More About

Category: All, Business, News