Bridgewater Bancshares, Inc. has successfully completed a private placement of $80.0 million in aggregate principal amount of 7.625% fixed-to-floating rate subordinated notes due 2035. The company intends to utilize the net proceeds to redeem $50.0 million of outstanding 5.25% fixed-to-floating rate subordinated notes due 2030 and for general corporate purposes.
The notes will bear interest at an annual rate of 7.625% from June 24, 2025, to June 30, 2030, with interest payable semi-annually during this period. From June 30, 2030, to the stated maturity date or early redemption date, the interest rate will be reset quarterly to an annual floating rate equal to the then-current three-month term secured overnight financing rate (SOFR) plus 388 basis points, with interest payable quarterly in arrears.
The notes are redeemable by the company, either in whole or in part, on or after June 30, 2030, and at any time upon the occurrence of certain events. The notes have been structured to qualify as tier 2 capital for regulatory capital purposes.
Bridgewater Bancshares, Inc.'s banking subsidiary, Bridgewater Bank, boasts total assets of $5.1 billion and nine strategically located branches as of March 31, 2025, solidifying its position as one of the largest locally-led banks in Minnesota.
The successful completion of this private placement not only reflects the company's ability to secure funding but also its proactive approach to managing its outstanding debt obligations, as evidenced by the decision to redeem $50.0 million of outstanding 5.25% fixed-to-floating rate subordinated notes due 2030.
This move positions Bridgewater Bancshares, Inc. to potentially benefit from the favorable terms of the new subordinated notes, providing the company with financial flexibility and the opportunity to optimize its capital structure. As a result of these announcements, the company's shares have moved 2.32% on the market, and are now trading at a price of $15.85. For more information, read the company's full 8-K submission here.
