Valley Financial (VYFC) in Roanoke, Va., has exited the Troubled Asset Relief Program after issuing $11 million in subordinated debt to an unnamed accredited investor.
The company said the note will pay a monthly interest rate ranging from 5.5% to 9.5%. Monthly payments will be $10,000 through October 2018, spiking to $173,000 from November of that year to October 2023. The note cannot be converted into common stock or preferred stock and will be treated as Tier 2 capital.
Valley Financial said it redeemed the remaining 9.6 million shares of preferred stock held by the Treasury Department, using proceeds from the debt issuance. The company paid the Treasury roughly $9.6 million in principal and $81,500 in accrued dividends.