Regions to Redeem $500M of Trups

Regions Financial (RF) in Birmingham, Ala., is taking steps to conform its capital to evolving regulatory requirements.

The $120 billion-asset company said Wednesday it would redeem roughly $498 million of trust-preferred securities.

The decision follows a proposal in June by the Federal Reserve to exclude, from the capital cushion banks are required to keep, trust-preferred securities and other instruments that permit the accumulation of unpaid dividends or interest.

The proposal triggered a provision in the trups agreements that gives Regions the right to redeem them. It will pay $1,000 per trust-preferred security, together with any unpaid or accrued interest.

Regions, which will fund the buyback with cash on hand, expects to redeem the securities on May 31.