Medallion Financial Repurchases Trust Preferred, Settles With ZimCal

Medallion Financial Corp. said it has bought back a batch of its trust preferred securities while also resolving a disagreement with an outside investor group, a combination the specialty lender framed as a step toward a simpler capital structure.

The New York-based company, which trades on Nasdaq under the ticker MFIN, disclosed that it signed a purchase and settlement agreement with BIMIZCI Fund LLC and ZimCal Asset Management LLC. The two investment firms are referred to jointly as the investor parties in the announcement.

Medallion originates and services loans across a range of consumer and commercial segments, and also provides loan-origination services to fintech partners. Trust preferred securities, a hybrid of debt and equity, have historically been used by finance companies to raise capital, and their retirement can alter a company's interest burden and leverage profile.

The release did not disclose the size of the repurchase, the price paid or the specific terms of the settlement. Management offered no additional comment beyond the announcement, and no timetable was given for closing the transaction or for any further action by the investor parties.