Filed Pursuant to Rule 424(b)(2)
Registration Nos. 333-131143 and 333-131143-04

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS SUPPLEMENT

 

This document consists of two parts. The first part is the prospectus supplement, which describes the specific terms of this offering. The second part is the prospectus, which describes more general information, some of which may not apply to this offering. You should read both this prospectus supplement and the accompanying prospectus, together with additional information described under the heading “Where You Can Find More Information” in the accompanying prospectus.

 

References in this prospectus supplement to “Huntington”, “we”, “us”, “our” or similar references mean Huntington Bancshares Incorporated and its consolidated subsidiaries, unless the context indicates that we only refer to the parent company, Huntington Bancshares Incorporated. References to the “Trust” mean Huntington Capital III.

 

If the information set forth in this prospectus supplement differs in any way from the information set forth in the accompanying prospectus, you should rely on the information set forth in this prospectus supplement.

 

You should rely only on the information contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus and any Free Writing Prospectus relating to the Trust Preferred Securities offered hereby prepared by or on behalf of us and no one is authorized to give information other than that contained herein and therein. This prospectus supplement may be used only for the purpose for which it has been prepared. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it.

 

We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information appearing in this prospectus supplement, the accompanying prospectus or any document incorporated by reference is accurate as of any date other than the date of the applicable document. Our business, financial condition, results of operations and prospects may have changed since that date. Neither this prospectus supplement nor the accompanying prospectus constitutes an offer, or an invitation on our behalf or on behalf of the underwriters, to subscribe for and purchase, any of the securities and may not be used for or in connection with an offer or solicitation by anyone, in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation.

 

This prospectus supplement and the accompanying prospectus contain or incorporate statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. They usually can be identified by the use of forward-looking language such as “will likely result”, “may”, “are expected to”, “is anticipated”, “estimate”, “forecast”, “projected”, “intends to”, or may include other similar words or phrases such as “believes”, “plans”, “trend”, “objective”, “continue”, “remain”, or similar expressions, or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, or similar verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including but not limited to those described in this prospectus supplement, the accompanying prospectus or the documents incorporated by reference, including the risk factors set forth in our most recent Annual Report on Form 10-K. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us.

 

There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to:

 

 

 

You should refer to our periodic and current reports filed with the Securities and Exchange Commission, or “SEC”, for further information on other factors which could cause actual results to be significantly different from those expressed or implied by these forward-looking statements. See “Where You Can Find More Information” in the accompanying prospectus.

 

SUMMARY

	•	issuing the Trust Preferred Securities and common securities representing undivided beneficial interests in the Trust;

	•	investing the gross proceeds of the Trust Preferred Securities and the common securities in the JSNs; and
	•	engaging in only those activities convenient, necessary or incidental thereto.

The Offering

 

The Trust will sell the Trust Preferred Securities to the public and its common securities to Huntington. The Trust will use the proceeds from those sales to purchase $      aggregate principal amount of  % Junior Subordinated Notes due 2067 of Huntington, which we refer to in this prospectus supplement as the “JSNs”. Huntington will pay interest on the JSNs at the same rate and on the same dates as the Trust makes payments on the Trust Preferred Securities. The Trust will use the payments it receives on the JSNs to make the corresponding payments on the Trust Preferred Securities.

 

The Trust Preferred Securities

 

Issuer		Huntington Capital III
Securities Offered		$         % Trust Preferred Securities, each Trust Preferred Security representing an undivided beneficial interest in Huntington Capital III.
Liquidation Amount		$1,000
Distributions		If you purchase Trust Preferred Securities, you will be entitled to receive periodic distributions on the stated liquidation amount of $1,000 per Trust Preferred Security (the “liquidation amount”) on the same payment dates and in the same amounts as Huntington pays interest to the Trust on a principal amount of JSNs equal to the liquidation amount of such Trust Preferred Security. Distributions will accumulate from May   , 2007. The Trust will make distribution payments on the Trust Preferred Securities:

 

	•	semi-annually in arrears on each May    and November   , beginning on November   , 2007 until May   , 2017;
	•	quarterly in arrears on each February   , May   , August    and November   , beginning on August   , 2017 until May   , 2047 (or if such day is not a business day, on the next business day); and
	•	thereafter monthly in arrears on the first day of each month (or if such day is not a business day, on the next business day).

(1)		Huntington may extend the Scheduled Maturity Date only upon satisfaction of certain criteria. See “Description of the Junior Subordinated Notes — Repayment of Principal.”
(2)		Latest date by which Huntington is required to repay any unpaid portion of the JSNs. See “Description of the Junior Subordinated Notes — Repayment of Principal.”
(3)		The JSNs are callable by Huntington in whole or in part on the discrete call dates in 2017 and 2027 and at any time after May   , 2037 without the payment of a make-whole premium. In addition, the JSNs are callable by Huntington in whole but not in part without the payment of a make-whole premium under certain circumstances. See “Description of the Junior Subordinated Notes — Redemption.”

Repayment of Principal		Huntington must repay the principal amount of the JSNs, together with accrued and unpaid interest, on the scheduled maturity date, subject to the limitations described below. The “ scheduled maturity date ” is initially May   , 2037, or if that date is not a business day, the next business day, but may be extended at Huntington’s option to May   , 2047 upon the satisfaction of certain criteria, as described under “Description of the Junior Subordinated Notes — Repayment of Principal”.
		Huntington is required to repay the JSNs on the scheduled maturity date to the extent of the net proceeds that it has raised from the issuance of “ qualifying capital securities ”, as described under “Replacement Capital Covenant”, during a 180-day period ending on a notice date not more than 30 or less than 10 business days prior to such date. If it has not raised sufficient net proceeds to permit repayment of all principal and accrued and unpaid interest on the JSNs on the scheduled maturity date, it will repay the JSNs to the extent of the net proceeds it has raised and the unpaid portion will

		remain outstanding. Huntington will be required to repay the unpaid portion of the JSNs on each subsequent interest payment date to the extent of the net proceeds it receives from any subsequent issuance of qualifying capital securities or upon the earliest to occur of:

	•	the redemption of the JSNs;
	•	an event of default that results in acceleration of the JSNs; and
	•	May   , 2067, which is the “ final repayment date ”.

		Huntington will use its commercially reasonable efforts, subject to a “ market disruption event ”, as described under “Description of the Junior Subordinated Notes — Market Disruption Events”, to raise sufficient net proceeds from the issuance of qualifying capital securities in a 180-day period ending on a notice date not more than 30 or less than 10 business days prior to the scheduled maturity date to permit repayment of the JSNs in full on the scheduled maturity date in accordance with the preceding paragraph. If Huntington is unable for any reason to raise sufficient proceeds, it will use its commercially reasonable efforts, subject to a market disruption event, to raise sufficient proceeds from the sale of qualifying capital securities to permit repayment of the JSNs on the following interest payment date, and on each interest payment date thereafter, until the JSNs are paid in full.
		Any unpaid principal amount of the JSNs, together with accrued and unpaid interest, will be due and payable on the final repayment date, regardless of the amount of qualifying capital securities Huntington has issued and sold by that time.
		Huntington is not required to issue any securities pursuant to the obligation described above other than qualifying capital securities.
		Under the current risk-based capital adequacy guidelines of the Federal Reserve, Federal Reserve approval is generally required for the early redemption of preferred stock or trust preferred securities included in regulatory capital. However, under current guidelines, rules and regulations, Federal Reserve approval is not required for the redemption of the Trust Preferred Securities on or after the scheduled maturity date in connection with the repayment of the JSNs as described above since, in this case, the redemption would not be an early redemption but would be pursuant to our contractual obligation to repay the JSNs.
Interest		The JSNs will bear interest:

	•	at the annual rate of  % from and including May    , 2007 to but excluding May   , 2017, payable semi-annually in arrears on May    and November    of each year, beginning on November   , 2007 until May   , 2017;

	•	at an annual rate equal to three-month LIBOR plus  % from and including May   , 2017 to but excluding May   , 2047, payable quarterly in arrears on February   , May   , August    and November    of each year, beginning on August   , 2017 until May   , 2047 (or if any such day is not a business day, on the next business day); and
	•	thereafter at an annual rate equal to one-month LIBOR plus  %, payable monthly in arrears on the first day of each month (or if any such day is not a business day, on the next business day).

		In the event any interest payment date on or prior to the regularly scheduled interest payment date in May 2017 is not a business day, the interest payment made on the following business day shall be made without adjustment.
Subordination		The JSNs will be unsecured and will be deeply subordinated upon Huntington’s liquidation, including to all of its existing and future senior debt, and will be effectively subordinated to all liabilities of its subsidiaries. Substantially all of Huntington’s existing indebtedness is senior debt. At March 31, 2007, Huntington’s indebtedness for money borrowed ranking senior to the JSNs upon liquidation, on a consolidated basis, was $31.9 billion and its subsidiaries’ direct borrowings and deposit liabilities that would effectively rank senior to the JSNs was $31.4 billion. See “Description of the Junior Subordinated Notes — Subordination” for the definition of “ senior debt ”.
Certain Payment Restrictions Applicable to Huntington		During any deferral period or period in which Huntington has given notice of its election to defer interest payments on the JSNs but the related deferral period has not yet commenced, Huntington generally may not make payments on or redeem or repurchase its capital stock or its debt securities or guarantees ranking pari passu with or junior to the JSNs, subject to the exceptions described under “Description of the Junior Subordinated Notes — Dividend and Other Payment Stoppages during Interest Deferral and under Certain Other Circumstances”. In addition, if any deferral period lasts longer than one year, Huntington generally may not be permitted to repurchase or acquire any of its securities ranking junior to or pari passu with any “qualifying APM securities” the proceeds of which were used to settle deferred interest during the relevant deferral period until the first anniversary of the date on which all deferred interest has been paid.
		The terms of the JSNs permit Huntington to make any payment of current or deferred interest on its debt securities or guarantees that rank on a parity with the JSNs upon its liquidation (“ parity securities ”) so long as the payment is made pro rata to the amounts due on parity securities (including the JSNs), subject to the limitations described in the last paragraph under “Description of the Junior Subordinated Notes — Alternative Payment Mechanism” to the extent that they apply,

		and any payment of deferred interest on parity securities that, if not made, would cause it to breach the terms of the instrument governing such parity securities.
Redemption of JSNs		Huntington may redeem the JSNs at any time. The redemption price will be 100% of the principal amount to be redeemed, plus accrued and unpaid interest through the date of redemption, in the case of any redemption:

	•	in whole or in part on May   , 2017 or May   , 2027;
	•	in whole but not in part at any time within 90 days of the occurrence of certain changes relating to the capital treatment of, or investment company laws relating to, the Trust Preferred Securities;
	•	in whole but not in part at any time after May   , 2017 and within 90 days of the occurrence of certain changes relating to the tax treatment of the Trust Preferred Securities; or
	•	in whole or in part at any time on or after May    2037 (including on or after the scheduled maturity date).

		In all other cases, the redemption price will be a make-whole redemption price. The make-whole redemption price may be lower in the case of a redemption of all outstanding JSNs prior to May   , 2017 within 90 days of the occurrence of certain changes relating to the tax treatment of, or the rating agency equity credit accorded to, the Trust Preferred Securities. See “Description of the Junior Subordinated Notes — Redemption”.
		Huntington will be subject to its obligations under the replacement capital covenant (as described below) if it elects to redeem any or all of the JSNs prior to the termination of the replacement capital covenant. In addition, under the current risk-based capital adequacy guidelines of the Federal Reserve applicable to bank holding companies, Federal Reserve approval is generally required for the early redemption of preferred stock or trust preferred securities included in regulatory capital.
Events of Default		The following events are “ events of default ” with respect to the JSNs:

	•	default in the payment of interest, including compounded interest, in full on any JSNs for a period of 30 days after the conclusion of a 10-year period following the commencement of any deferral period;
	•	bankruptcy of Huntington; or
	•	receivership of a major subsidiary depository institution of Huntington within the meaning of the Federal Reserve’s risk-based capital guidelines applicable to bank holding companies. As of the date of this prospectus supplement,

		The Huntington National Bank is Huntington’s only major subsidiary depository institution.

		If an event of default under the indenture occurs and continues, the indenture trustee or the holders of at least 25% in aggregate principal amount of the outstanding JSNs may declare the entire principal and all accrued but unpaid interest of all JSNs to be due and payable immediately. If the indenture trustee or the holders of JSNs do not make such declaration and the JSNs are beneficially owned by the Trust or a trustee of the Trust, the property trustee or the holders of at least 25% in aggregate liquidation amount of the Trust Preferred Securities shall have such right. The property trustee may annul the declaration and waive the default, provided all defaults have been cured and all payment obligations have been made current. Should the property trustee fail to annul the declaration and waive the default, the holders of a majority in aggregate liquidation amount of the Trust Preferred Securities have the right to do so.
Tax Treatment		In connection with the issuance of the JSNs, Shearman & Sterling LLP, Huntington’s special tax counsel, has advised us that, under current law and assuming full compliance with the terms of the indenture and other relevant documents, and based on the representations, facts and assumptions set forth in its opinion, although the matter is not free from doubt, the JSNs will be characterized as indebtedness for U.S. federal income tax purposes. The Trust Preferred Securities are novel financial instruments, and there is no statutory, judicial or administrative authority that directly addresses the U.S. federal income tax treatment of securities similar to the Trust Preferred Securities. Thus, no assurance can be given that the Internal Revenue Service or a court will agree with this characterization. By purchasing the Trust Preferred Securities, each holder of the Trust Preferred Securities agrees, and Huntington and the Trust agree, to treat the JSNs as indebtedness for all U.S. federal income tax purposes. See “Certain United States Federal Income Tax Consequences”.

	•	in the case of a redemption or purchase prior to the scheduled maturity date, Huntington has obtained the prior approval of the Federal Reserve if such approval is then required under the Federal Reserve’s capital guidelines or policies applicable to bank holding companies; and

	•	the principal amount repaid or the applicable redemption or purchase price does not exceed a maximum amount determined by reference to:

	•	the applicable percentage of the aggregate amount of (i) net cash proceeds Huntington and its subsidiaries have received from the sale of common stock or rights to acquire common stock (including common stock or rights to acquire common stock issued pursuant to Huntington’s dividend reinvestment plan or employee benefit plans), (ii) the market value of any common stock that Huntington or any of its subsidiaries have delivered as consideration for property or assets in an arm’s-length transaction and (iii) the market value of any common stock that Huntington or any of its subsidiaries issued in connection with the conversion or exchange of any convertible or exchangeable securities, other than securities for which Huntington or any of its subsidiaries has received equity credit from any rating agency, plus
	•	100% of the aggregate amount of net cash proceeds Huntington and its subsidiaries have received from the sale of “debt exchangeable for common equity”, “debt exchangeable for preferred equity”, “mandatorily convertible preferred stock” or “REIT preferred securities”, plus
	•	100% of the aggregate amount of net cash proceeds Huntington and its subsidiaries have received from the sale of “qualifying capital securities”,

Selected Financial Data

SELECTED HISTORICAL FINANCIAL DATA OF HUNTINGTON

 

Set forth below are highlights from Huntington’s consolidated financial information as of and for the five-year period ended December 31, 2006, which is derived from the audited consolidated financial statements, and as of and for the three months ended March 31, 2007 and 2006, which is derived from the unaudited condensed consolidated financial statements. The selected historical financial data is only a summary, and you should read this information in conjunction with Huntington’s audited consolidated financial statements and related notes included in Huntington’s Annual Report on Form 10-K for the year ended December 31, 2006 and Huntington’s Quarterly Report on Form 10-Q for the three months ended March 31, 2007, both of which have been filed with the SEC and are incorporated by reference in this document and from which this information is derived. See “Where You Can Find More Information” in the accompanying prospectus.

 

Huntington’s historical financial data may not be indicative of the results of operations or financial position to be expected in the future.

		Three Months Ended March 31,								Year Ended December 31,
		2007				2006				2006				2005				2004				2003				2002
Statements of Income:
Interest income		$	534,949			$	464,787			$	2,070,519			$	1,641,765			$	1,347,315			$	1,305,756			$	1,293,195
Interest expense			279,394				221,107				1,051,342				679,354				435,941				456,770				543,621