KeyCorp sets exchange ratio in offer for 7.75% convertible preferreds

By Susanna Moon

Chicago, June 29 - KeyCorp said it set exchange ratios in the offer to issue common shares in exchange for its $503.53 million of 7.75% series A non-cumulative perpetual convertible preferred stock.

The company will issue 13.721 common shares for each preferred accepted for exchange.

The exchange ratio was determined by adding 7.0922 KeyCorp common shares to the number of shares equal to $35.00 divided by $5.28, the arithmetic average of the daily volume-weighted average per share price of KeyCorp common shares for each trading day in the five consecutive trading days ended June 26.

The ratio was subject to a maximum of 21.0922 common shares and a minimum of 7.0922 common shares.

The early tender deadline was 5 p.m. ET on June 16. The tender offer will expire at 11:59 p.m. ET on June 30.

The company is also holding an exchange offer for the trust preferred securities of KeyCorp Capital I, KeyCorp Capital II, KeyCorp Capital III and KeyCorp Capital VII.

These exchanges are the principal components of KeyCorp's plan to improve its tier 1 common equity ratio as required under the Supervisory Capital Assessment Program of the U.S. Treasury and the Federal Reserve System. KeyCorp was told it must raise $1.8 billion in additional tier 1 common equity.

Computershare Trust Co., NA (781 575-2332) is the exchange agent, and D.F. King & Co., Inc. (800 431-9633 or, for bankers and brokers, 212 269-5550) is the information agent.

KeyCorp is the holding company for KeyBank and is based in Cleveland.

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