Quaint Oak Bancorp Issues $10 Million in Fixed Rate Senior Notes

Quaint Oak Bancorp, Inc. announced on February 21, 2025, that it has entered into a Senior Unsecured Note Purchase Agreement with certain institutional accredited investors. Under the terms of the agreement, the company sold an aggregate of $9.75 million in Fixed Rate Unsecured Senior Notes due March 1, 2028 through a private placement. An additional $250,000 had been committed prior to the announcement, bringing the total principal amount to $10.0 million. Piper Sandler & Co. served as the exclusive placement agent for the offering.

The notes will carry an annual fixed interest rate of 11.00%, with interest payments made semi-annually in arrears on March 1 and September 1, beginning on September 1, 2025. The maturity date for the notes is set for March 1, 2028. Additionally, commencing on or after March 1, 2026, the company may opt to redeem the notes in whole or in part, subject to specified redemption pricing that declines over time and requires advance notice of between 30 to 60 days. Notably, the notes are not redeemable at the option of the holders, and in the event of certain defaults, including the company’s bankruptcy, holders have the right to declare the notes immediately payable.

A notable provision of the notes is that the Company must maintain a minimum level of cash, marketable securities, or other cash equivalents—up to one calendar year’s worth of the interest payment—throughout the life of the notes. Furthermore, the notes rank pari passu with other existing and future senior unsecured indebtedness of the Company and hold a senior position relative to any future indebtedness that is expressly subordinated to them. However, the notes are effectively subordinated to any secured indebtedness to the extent of the value of the assets pledged as collateral.

The company indicated its intention to use the net proceeds from the sale to repay a portion of its outstanding $14.0 million aggregate principal amount of 8.5% Fixed Rate Subordinated Notes maturing on March 15, 2025. The offering was conducted in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act of 1933 and Rule 506(b) of Regulation D, with sales limited to accredited investors and qualified institutional buyers.

Exhibits related to the Purchase Agreement and the form of the Senior Unsecured Note are incorporated by reference in the filing and provide further details on the terms and conditions of the notes and the associated risk factors.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Quaint Oak Bancorp’s 8K filing here.

About Quaint Oak Bancorp

Quaint Oak Bancorp, Inc operates as the holding company for Quaint Oak Bank that provides banking products and services in Pennsylvania. It offers various deposit products, including money market accounts, certificates of deposit, interest and non-interest-bearing checking accounts for businesses and consumers, and savings accounts.