FDIG NEWS RELEASE
FlDHAL O(P'OSIT INSU.ANCE COIPOIATION
FOR IMMEDIATE RELEASE PR-164-86 (10-16-86)
FDIC CHAIRMAN SEIDMAN ANNOUNCES
PUBLIC SALE OF CONTINENTAL ILLINOIS STOCK
The Federal Deposit Insurance Corporation today announced its intention to
sell a portion of its stock holdings in Continental Illinois National Bank &
Trust Company before the end of the year.
A registration statement will be filed shortly with the Securities and
Exchange Commission for 50 million shares of Continental Illinois Corporation
common stock, according to FDIC Chairman L. William Seidman.
"This would bring the volume of publicly owned shares to about 65 million
and reduce our current ownership in the company by approximately 30 percent,"
Mr. Seidman told reporters in a luncheon speech at the National Press Club in
Washington, D.C. "We recognize the size of the proposed public offering is
relatively modest. But, we are attempting to balance two, possibly competing,
goals--a quick privatization of Continental and maximum recovery of deposit
insurance fund outlays," he added.
The public offering will amount to about 30 percent of the 32 million
shares of Junior Convertible Preference stock owned by the FDIC, each of which
will convert to five shares of common stock upon transfer by the FDIC.
The FDIC in 1984 acquired an 80 percent ownership interest in Continental
as part of a comprehensive assistance program designed to restore public
confidence in the Midwest banking institution. Continental--then the eighth
largest banking organization in the country--had been incurring significant
losses resulting, in part, from loan participations purchased from the failed
Oklahoma-based Penn Square National Bank. Rumors concerning these losses had
triggered a run among Continental's uninsured depositors, thus jeopardizing
the bank's continued viability.
-more-
FEDERAL DEPOSIT INSURANCE CORPORATION, 550 Seventeenth St., N.W., Washington, D.C. 20429 • 202-898-6996
FlDHAL O(P'OSIT INSU.ANCE COIPOIATION
FOR IMMEDIATE RELEASE PR-164-86 (10-16-86)
FDIC CHAIRMAN SEIDMAN ANNOUNCES
PUBLIC SALE OF CONTINENTAL ILLINOIS STOCK
The Federal Deposit Insurance Corporation today announced its intention to
sell a portion of its stock holdings in Continental Illinois National Bank &
Trust Company before the end of the year.
A registration statement will be filed shortly with the Securities and
Exchange Commission for 50 million shares of Continental Illinois Corporation
common stock, according to FDIC Chairman L. William Seidman.
"This would bring the volume of publicly owned shares to about 65 million
and reduce our current ownership in the company by approximately 30 percent,"
Mr. Seidman told reporters in a luncheon speech at the National Press Club in
Washington, D.C. "We recognize the size of the proposed public offering is
relatively modest. But, we are attempting to balance two, possibly competing,
goals--a quick privatization of Continental and maximum recovery of deposit
insurance fund outlays," he added.
The public offering will amount to about 30 percent of the 32 million
shares of Junior Convertible Preference stock owned by the FDIC, each of which
will convert to five shares of common stock upon transfer by the FDIC.
The FDIC in 1984 acquired an 80 percent ownership interest in Continental
as part of a comprehensive assistance program designed to restore public
confidence in the Midwest banking institution. Continental--then the eighth
largest banking organization in the country--had been incurring significant
losses resulting, in part, from loan participations purchased from the failed
Oklahoma-based Penn Square National Bank. Rumors concerning these losses had
triggered a run among Continental's uninsured depositors, thus jeopardizing
the bank's continued viability.
-more-
FEDERAL DEPOSIT INSURANCE CORPORATION, 550 Seventeenth St., N.W., Washington, D.C. 20429 • 202-898-6996
-2-
To restore confidence in Continental the FDIC established an assistance
plan which included an approximately $4.5 billion investment in the
institution. Under this assistance plan the FDIC purchased $720 million in
Junior Convertible Preference shares (convertible into 160 million shares of
common stock). The FDIC also acquired $280 million in adjustable rate
preferred stock and agreed to purchase troubled loans for $3.5 billion.
###
To restore confidence in Continental the FDIC established an assistance
plan which included an approximately $4.5 billion investment in the
institution. Under this assistance plan the FDIC purchased $720 million in
Junior Convertible Preference shares (convertible into 160 million shares of
common stock). The FDIC also acquired $280 million in adjustable rate
preferred stock and agreed to purchase troubled loans for $3.5 billion.
###