Medallion Financial Corp. said Tuesday that it will sell 2.9 million shares in a stock offering that will help it offer more loans to its customers.
The shares were priced at $16.40, 6.5 percent below Monday's closing price of $17.54. At that price, the stock offering could help the lender raise about $47.6 million. Medallion Financial said the banks managing the deal have an option to purchase an additional 435,000 shares.
Medallion Financial, which is based in New York, specializes in offering loans buying the taxi licenses known as medallions. Taxi medallions are needed in New York and other cities in order to operate a taxi. The company said it will use the money raised to make new loans and pay down debt.
The offering is expected to close Dec. 6. Morgan Stanley & Co.; Keefe, Bruyette & Woods Inc.; and Sandler O'Neill & Partners L.P. are managing the deal.
Shares of Medallion Financial fell $1.40, 8 percent, to $16.14 in morning trading Tuesday. Stock sales often weigh on company shares because they make existing investors' stakes worth less.