UPDATE 1-Sterling Financial says Warburg Pincus to invest

* Warburg Pincus to invest $139 mln in Sterling

* THL adjusts proposed investment size

* After deal, Warburg will own 20.5 pct of Sterling
May 24 (BestGrowthStock) – Sterling Financial Corp (STSA.O: ) said
Warburg Pincus would join Thomas H. Lee Partners [THL.UL] to
invest $139 million each in the bank holding company once the
troubled lender redeems all its preferred shares from Treasury.

Earlier this month, the troubled lender said it intended to
offer about $555 million of securities to institutional
investors in a private placement transaction, including about
221.9 million common shares at 20 cents a share.

Thomas H. Lee Partners has agreed to adjust the size of its
proposed investment to an amount equal to that of fellow
private equity firm Warburg, Sterling said.

Sterling Financial had said earlier that THL planned to
increase its proposed investment in Sterling to $170 million
from $134.7 million.

However, Sterling has to raise at least $720 million,
including the THL and Warburg investments, and meet regulatory
capital requirements before it can go through with any of the

If the recapitalization transactions are completed, Warburg
Pincus would own common stock, preferred stock and warrants
representing about 20.5 percent of Sterling, the company said.

Warburg Pincus Managing Director David Coulter will join
the Sterling board after the recapitalization transactions.

Shares of the company closed at 75 cents Friday on Nasdaq.
The shares have lost about 80 percent of their value in the
past year.

Stock Trading

(Reporting by Supantha Mukherjee in Bangalore; Editing by Mike

UPDATE 1-Sterling Financial says Warburg Pincus to invest