Old National Bank Agrees to $99.7 Million Sale leaseback of 25 Bank Branches

SEC Edgar Database - September 19, 2007

Old National Bank and ONB Insurance Group, Inc. (collectively, “Old National”), subsidiaries of Old National Bancorp (the “Company”), entered into a Purchase and Sale Agreement, dated September 19, 2007, to sell a portfolio of 25 of its banking properties and one insurance property (collectively, the “Properties”) to five limited liability companies (collectively, the “Buyers”). SunTrust Equity Funding, LLC is the sole member of each Buyer. The closing of the sale of the Properties occurred on September 19, 2007 contemporaneously with the execution and delivery of the Purchase and Sale Agreement.

Old National has entered into five lease agreements, each dated September 19, 2007 (the “Lease Agreements”), with the Buyers, whereby Old National has agreed to lease each of the Properties back from the Buyers for terms expiring September 30, 2031. Under each of the Lease Agreements, Old National has the right at its option to extend the term of the lease for four additional successive terms of five years each, upon specified terms and conditions. Old National is obligated to pay (on a monthly basis) aggregate base rents for the Properties in the aggregate annual amount of $9.0 million (i.e. a 9.0% cap rate) to the Buyers under the Lease Agreements through September 30, 2027; no rent is payable for the final four years of the initial 24-year term. For financial reporting purposes, the rents will be expensed ratably over the 24-year term at an annual rate of $7.5 million.

The Company anticipates that it will enter into a similar sale/leaseback transaction with SunTrust Equity Funding LLC in the fourth quarter of 2007 relating to approximately one trust property and 57 of its banking properties. Sphere: Related Content