As SunTrust Banks Inc. General Counsel Ray Fortin tells it, in the course of a single, hectic weekend, a phalanx of lawyers and investment bankers managed to put together the bank's recent offering of 124.2 million shares of common stock—resulting in more than $1.5 billion in new capital.

“It did move fast,” he said. “We had a shelf registration statement which permitted us to do this, and we moved it pretty quickly.”

A team of lawyers from King & Spalding, led by partner Keith M. Townsend, represented the bank. The underwriters' lead counsel was Mark J. Welshimer at Sullivan & Cromwell in New York.

The impetus for the offering was the federal government's so-called stress test on the nation's 19 largest banks, including SunTrust, to determine how they would fare if the economic situation worsens. “The Fed indicated that we needed to raise $2.2 billion in common equity,” Fortin said. “We were well capitalized, but they wanted to change the composition of capital.”

Under the terms of the stress test, completed May 7, the bank had 30 days to submit a plan to raise capital, and until Nov. 8 to carry it out. But SunTrust, which like many other financial institutions was hit with soured real estate loans and resulting lower share prices, moved much faster than that.

Fortin said the bank submitted a capital plan and in May launched an at-the-market transaction, meaning that SunTrust could release small amounts of shares into the market, an approach which ultimately yielded about $258 million. SunTrust also sold some Visa shares for a net after-tax gain of $70 million. But eventually, Fortin said, “We just decided to get it all done.”

So, he said, SunTrust executives consulted with the bank's board and with investment bankers at Morgan Stanley, Sandler O'Neill, SunTrust Robinson Humphrey and Goldman Sachs. Starting on the last Friday in May, in-house lawyers from SunTrust, with the King & Spalding team and counsel for the underwriters, put the deal together and launched the common stock offering four days later, on June 1.

“Because we were in the capital-raising mode, we had already been discussing with the underwriters and our board the various capital-raising options, so all we really did was change the methodology of how we'd do it,” he said. “We were already in the process, so that's another reason it moved relatively quickly.”

SunTrust's shelf registration statement—documents filed with the Securities and Exchange Commission that outline the basics of stock offerings a company might wish to pursue in the future—also helped speed the process. That's because when the bank decided to launch this latest offering, it did not need to start from scratch with the SEC, and instead needed only to produce a prospectus supplement to describe exactly what it was doing, Fortin said.

Fortin called the most recent stock offering a success because shares from the new offering sold for roughly what existing shares were trading for on the open market. That's a good result, he said, because normally such shares would be purchased at a discount when sold in large blocks to institutional investors. On June 1, the opening date of the new offering, shares began selling at about $13; by June 5, the last day of the offering, prices had risen to almost $17, according to Google Finance.

Now, Fortin said, SunTrust needs to raise about $100 million more to meet its obligations under the Federal Reserve's Supervisory Capital Assessment Program, known as SCAP. He said the bank was looking at a variety of ways to do that.

“We have … an exchange offer where we are offering to buy with cash some of our preferred stock,” he said. “That's outstanding, and that is actually going to produce some gains and thereby produce some capital. There's also additional discussions with the Fed as to … things that they will allow to be treated as capital, such as tax-loss carry-forwards.”

A tax-loss carry-forward, he said, allows the bank to apply tax losses in one year to earnings in another, thereby lowering its tax burden.

“We're highly confident that we are basically done,” he said of the bank's mandate to comply with the stress test. “We now are very, very, very solidly capitalized. You know we have enough capital to go through what the Fed called the most adverse scenario and still be well-capitalized. So we're in great shape.”