Oct. 4--The last two times Sovran Self Storage sold more stock to investors, it meant a two-week road trip for David Rogers, the company's chief financial officer, to meet with big investors and convince them to buy more shares.

When Sovran sold extra stock again last week, Rogers got to stay home, and investors still snapped up the shares overnight. Demand was so strong that Sovran even was able to increase the size of the offering by 17 percent, which brought in another $14 million to the Williamsvillebased company that runs Uncle Bob's self storage facilities in 24 states.

"We had a lot of demand," Rogers says. "There's a lot of cash on the sidelines."

A year after the financial crisis boiled over, sending the stock market into a free-fall that lasted into March and making it extremely difficult for companies to borrow money or raise new capital, investors who were scurrying to the sidelines to lick their financial wounds last winter are getting back in a buying mood.

And three Buffalo Niagara companies are joining the growing rush among businesses across the country to cash in on the resurgent optimism among investors.

Within the last two weeks, Sovran has been joined by Elma motion control equipment maker Moog Inc. and Pendleton- based banking company First Niagara Financial Group in selling additional stock to investors.

Those three secondary offerings have brought more than $615 million in new capital to those companies, allowing them to pay down money they had borrowed to make acquisitions and put their finances on more solid footing.

"There's all kinds of money flowing into Western New York," Rogers says.

John Koelmel, First Niagara's president and chief executive officer, has seen the changes in the capital markets up close. Despite the deep freeze that prevented virtually all companies from selling new stock throughout the last fall and winter, First Niagara did the extraordinary, completing secondary stock offerings not once, not twice, but three different times since last October. Those stock sales raised $937 million in new capital that helped finance a pair of Pennsylvania acquisitions that will increase its asset base by two-thirds.

"When we went to the market a year ago, it was an attempt to capture a small slice before the market completely closed," Koelmel says. "When we went back in April, we were the first ones back."

But First Niagara was hardly alone in the capital markets with its latest--and biggest--$460 million stock offering, which closed last week. "One of the challenges we had last week was competing for dollars," Koelmel says.

Indeed, 96 companies had secondary stock offerings in September, according to Bloomberg data. That was the most in any single month since June 1996 as the strong rebound in the stock market from its March lows unleashed a huge pent-up demand for new capital from companies looking to replace debt with new equity as their own share prices have risen.

For Moog, the $75 million it raised from its stock sale will cover almost all of the $90 million it borrowed to buy the flight control actuation business of GE Aviation Systems in Wolverhampton, England.

For Sovran, the $99 million it raised will allow it to pay back some of its $250 million in unsecured debt. The stock sale, coupled with a 30 percent cut in the company's dividend in May, also should keep Sovran from running afoul of the leverage limits within its borrowing agreements, as the company did this spring, and allow it to fully use its line of credit.

Rogers also hopes the stock sale will lead to an upgrade in its credit rating back to investment grade, reversing the $3.6 million increase in interest rates Sovran was hit with after the loan covenant violation led to a credit rating downgrade last spring.

drobinson@buffnews.com

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