Final Pricing Term Sheet

May 20, 2009

REGIONS FINANCIAL CORPORATION

(the “Company”)

The following information supplements both (i) the Preliminary Prospectus Supplement dated May 20, 2009 for the offering of 10% Mandatory Convertible Preferred Stock, Series B and (ii) the Preliminary Prospectus Supplement dated May 20, 2009 for the offering of Common Stock, each filed pursuant to Rule 424(b) under the Securities Act, Registration Statement No. 333-140778.

10% MANDATORY CONVERTIBLE PREFERRED STOCK OFFERING

 

TITLE OF SECURITIES:		10% Mandatory Convertible Preferred Stock, Series B
AGGREGATE AMOUNT OFFERED:		$250,000,000 initial liquidation preference
SHARES TO BE ISSUED:		250,000 Shares
INITIAL LIQUIDATION PREFERENCE PER SHARE:		$1,000.00
OPTION FOR ADDITIONAL SHARES:		37,500 Shares
PRICE TO PUBLIC:		100% of initial liquidation preference
ANNUAL DIVIDEND RATE:		10% per share on the initial liquidation preference of $1,000.00 per share ($100.00 per annum), payable quarterly in arrears; dividends are cumulative
FIRST DIVIDEND DATE:		August 15, 2009
EXPECTED AMOUNT OF FIRST DIVIDEND PAYMENT PER SHARE:		$21.67

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DAY COUNT:		30/360
EXPECTED AMOUNT OF EACH SUBSEQUENT DIVIDEND PAYMENT PER SHARE:		$25.00
REDEMPTION:		None
MANDATORY CONVERSION DATE:		December 15, 2010
THRESHOLD APPRECIATION PRICE:		$4.40 (represents an approximately 10% appreciation over the initial price)
INITIAL PRICE:		$4.00
CONVERSION RATE:		The conversion rate, which is the number of shares of Common Stock issuable upon conversion of each share of Mandatory Convertible Preferred Stock on the applicable conversion date (excluding shares of our Common Stock, if any, issued in respect of accrued and unpaid dividends), will, subject to anti-dilution adjustments, be as follows:
		• if the applicable market value of our Common Stock is equal to or greater than $4.40, the threshold appreciation price, then the conversion rate will be 227.2727 shares of our Common Stock per share of Mandatory Convertible Preferred Stock (the “minimum conversion rate”), which is equal to $1,000 divided by the threshold appreciation price;
		• if the applicable market value of our Common Stock is less than the threshold appreciation price but greater than $4.00, the initial price, then the conversion rate will be equal to $1,000 divided by the applicable market value of our Common Stock; or
		• if the applicable market value of our Common Stock is less than or equal to the initial price, then the conversion rate will be 250.0000 shares of Common Stock per share of Mandatory Convertible Preferred Stock (the “maximum conversion rate”), which is equal to $1,000 divided by the initial price.

 

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		The maximum conversion rate and minimum conversion rate will be subject to anti-dilution adjustments pursuant to the formulas set forth in the preliminary prospectus. If an adjustment is made to the maximum conversion rate and minimum conversion rate, an inversely proportional adjustment also will be made to the threshold appreciation price and the initial price solely for the purposes of determining which clauses of the definition of the conversion rate will apply on the conversion date.
SHARE CAP:		400.0000 Shares, which is 1.6 times the maximum conversion rate.
FUNDAMENTAL CHANGE CONVERSION RATE:		The table attached as Schedule A sets forth the fundamental change conversion rate per share of the Mandatory Convertible Preferred Stock for each hypothetical stock price and effective date indicated. These rates are also subject to anti-dilution adjustments pursuant to the formulas set forth in the preliminary prospectus.
NET PROCEEDS OF THE MANDATORY CONVERTIBLE PREFERRED STOCK OFFERING AFTER
UNDERWRITERS’ DISCOUNT AND ESTIMATED EXPENSES:		Approximately $241.3 million (approximately $277.7 million if the underwriters’ option to purchase 37,500 additional shares of Mandatory Convertible Preferred Stock is exercised in full).
USE OF PROCEEDS:		The Company expects to use the net proceeds from the sale of the Mandatory Convertible Preferred Stock for general corporate purposes.
UNDERWRITERS’ DISCOUNT:		3.0% (or $30.00 per share)
TRADE DATE:		May 20, 2009
SETTLEMENT DATE:		May 27, 2009
CUSIP:		7591EP209

 

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NO LISTING:		Application will be made to list the shares of Common Stock issuable upon conversion of the Mandatory Convertible Preferred on the New York Stock Exchange; the Mandatory Convertible Preferred Stock will not be listed on any exchange.
COMMON STOCK OFFERING
TITLE OF SECURITIES:		Common Stock
SHARES TO BE ISSUED:		400,000,000 Shares (100% primary)
OPTION FOR ADDITIONAL SHARES:		60,000,000 Shares
PRICE TO PUBLIC:		$4.00 per share
OUTSTANDING COMMON SHARES AFTER OFFERING (ASSUMING NO EXERCISE OF THE UNDERWRITERS’
OPTION TO PURCHASE ADDITIONAL SHARES):		Approximately 1,095 million shares (based on the number of shares outstanding as of April 30, 2009, and assuming no exercise of the underwriters’ option to purchase additional shares) excluding (a) approximately 48 million shares of Common Stock issuable upon conversion of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A; (b) 62.5 million shares that will be issuable upon conversion of the 10% Mandatory Convertible Preferred Stock (assuming no exercise of the underwriters’ option for purchase additional shares of Mandatory Convertible Preferred Stock and payment of all dividends in cash and based on the maximum conversion rate described above), (c) up to 107 million shares issuable pursuant to the Company’s offer to exchange shares of its common stock for 6.625% Trust Preferred Securities issued by Regions Financing Trust II and (d) approximately 70 million shares issuable upon exercise of outstanding stock options and restricted stock awards.

 

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NET PROCEEDS OF THE COMMON STOCK OFFERING
AFTER UNDERWRITERS’ DISCOUNT:		Approximately $1.54 billion (approximately $1.77 billion if the underwriters’ option to purchase additional shares is exercised in full)
USE OF PROCEEDS:		The Company expects to use the net proceeds from the sale of our common stock for general corporate purposes.
UNDERWRITERS’ DISCOUNT:		3.75%
LAST SALE (ON MAY 20, 2009):		$4.89
TRADE DATE:		May 20, 2009
SETTLEMENT DATE:		May 27, 2009
CUSIP:		7591EP100

INFORMATION RELATING TO BOTH OFFERINGS

The issuer has filed a registration statement (including prospectus supplements) with the SEC for the offerings to which this communication relates. Before you invest, you should read the prospectus supplements and the accompanying prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and these offerings. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, you request may request copies of these documents it by calling Goldman, Sachs & Co., Attention: Prospectus Department, 85 Broad Street, New York, NY 10004, telephone: 212-902-1171 or 866-471-2526, fax: 212-902-9316, email: Prospectus-ny@ny.email.gs.com, or J.P. Morgan Securities Inc., 4 Chase Metrotech Center, CS Level, Brooklyn, NY 11245, Attention: Prospectus Department, 718-242-8002.

UPDATED INFORMATION RELATING TO EXCHANGE OFFER

 

OFFEROR:		Regions Financial Corporation
SECURITIES SOUGHT IN EXCHANGE OFFER:		6.625% Trust Preferred Securities issued by Regions Financing Trust II
SECURITIES OFFERED:		Up to 107,000,000 shares of Common Stock of Regions Financial Corporation (reduced from up to 138,000,000 as initially announced)

 

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SCHEDULE A

FUNDAMENTAL CHANGE CONVERSION RATE

 

		$1.00		$2.00		$3.00		$4.00		$4.40		$5.00		$7.50
5/27/2009		376.8849		302.0735		266.3344		250.0000		252.0815		253.9217		243.8962
8/15/2009		358.3930		293.6647		269.8095		250.0000		254.3686		250.5035		241.5881
11/15/2009		339.7630		285.5212		264.4964		250.0000		250.5944		247.1245		239.2663
2/15/2010		320.6322		277.5731		259.3894		250.0000		246.8459		243.7225		236.8667
5/15/2010		300.6929		269.8111		254.6055		250.0000		243.1111		240.2474		234.3233
8/15/2010		279.8448		262.4960		250.9067		250.0000		239.5533		236.6799		231.5452
11/15/2010		258.1203		254.0198		250.5492		250.0000		236.0683		231.8533		228.3381
12/15/2010		250.0000		250.0000		250.0000		250.0000		227.2727		227.2727		227.2727
		$10.00		$15.00		$20.00		$30.00		$50.00		$75.00		$100.00
5/27/2009		239.2664		234.9381		232.8546		230.7698		229.0564		228.1755		227.7295
8/15/2009		237.5581		233.8461		232.0650		230.2748		228.7996		228.0442		227.6633
11/15/2009		235.8344		232.7428		231.2640		229.7702		228.5406		227.9155		227.6016
2/15/2010		234.0469		231.5940		230.4242		229.2383		228.2688		227.7801		227.5355
5/15/2010		232.1560		230.3772		229.5304		228.6733		227.9807		227.6338		227.4603
8/15/2010		230.1489		229.1018		228.5984		228.0935		227.6893		227.4871		227.3861
11/15/2010		228.0433		227.7708		227.6346		227.4984		227.3895		227.3350		227.3077
12/15/2010		227.2727		227.2727		227.2727		227.2727		227.2727		227.2727		227.2727

 

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If the stock price is between two stock price amounts on the table or the effective date is between two dates on the table, the fundamental change conversion rate will be determined by straight-line interpolation between the fundamental change conversion rates set forth for the higher and lower stock price amounts and the two dates, as applicable, based on a 365-day year;

 

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if the stock price is in excess of $100.00 per share (subject to adjustment as described the preliminary prospectus for the Mandatory Convertible Preferred Stock), then the fundamental change conversion rate will be the minimum conversion rate, subject to anti-dilution adjustment as set forth in the preliminary prospectus for the Mandatory Convertible Preferred Stock; and

 

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if the stock price is less than $1.00 per share (subject to adjustment as described the preliminary prospectus for the Mandatory Convertible Preferred Stock) (the “minimum stock price”), then the fundamental change conversion rate will be determined as if the stock price equaled the minimum stock price, using the straight-line interpolation, as described herein, if the effective date is between two dates on the table, subject to adjustment.

 

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