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SEC Follow Up Exhibits Part C SEC_OEA_FCIC_001760-2501

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Fallon, Zachary<br />

From: McCormick, Tim<br />

Sent: Wednesday, December 17, 2008 6:30 PM<br />

To: <strong>OEA</strong>-Archives; Edwards, Amy K.<br />

Subject: FW: Convertible Preferred Offering<br />

Attachments: NATIONALCITYCOR424B2.rtf; NATIONALCITYCOR8K[1].pdf<br />

I talked to Nick Panos in Corp Fin briefly about this over the phone and then sent him this. He told me that a few years<br />

ago, there was a uproar over shareholder approval related to a transaction by Sovereign Bank.<br />

_____________________________________________<br />

From: McCormick, Tim<br />

Sent: Tuesday, December 16, 2008 5:30 PM<br />

To: Panos, Nicholas<br />

Subject: Convertible Preferred Offering<br />

http://dealbook.blogs.nytimes.com/2008/04/22/the-rights-issue/<br />

NATIONALCITYCOR<br />

424B2.rtf (877 ...<br />

NATIONALCITYCOR<br />

8K[1].pdf (441 ...<br />

http://seekingalpha.com/article/95670-national-city-gets-approval-to-raise-capital<br />

It seems like you can raise capital first via convertible preferred (with senior dividend rights to common and other<br />

significant advantages to common) and then much later ask for shareholder approval to convert the shares. That is much<br />

different requirement than having to go get shareholder approval first and then issuing the convertibles. My read of the<br />

NYSE rule is that they needed PRIOR approval to do this deal since the effective offer price was discounted to stock’s<br />

market price and the preferred stock dilutes common shareholders by more than 20%. Why were they able to do this<br />

offering?<br />

http://content.lawyerlinks.com/default.htm#http://content.lawyerlinks.com/sec/NASDAQ/shldr_approval_reqs.html<br />

Tim McCormick<br />

Office of Economic Analysis<br />

U.S. Securities and Exchange Commission<br />

100 F Street NE<br />

Washington, DC 20549-9040<br />

(202) 551-6633<br />

1

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