By Abigail W. Adams
Portland, Me., Feb. 27 – Huntington Bancshares Inc. priced $500 million of 5.7% series E fixed-to-floating rate non-cumulative perpetual preferred stock (expected Baa3/BB/BB) at par after the market close on Tuesday.
The preferred stock will be sold as depositary shares with a liquidation preference of $1,000, which represents 1/100th of an interest in the series E preferred stock.
Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Huntington Capital Markets are the joint bookrunners for the offering.
Dividends will be payable quarterly upon the authorization of the board of directors. The depositary shares will carry a fixed dividend of 5.7% until April 15, 2023.
The dividend will then switch to a floating rate of Libor plus 288 basis points, according to the term sheet.
The preferred stock is callable on dividend dates starting April 15, 2023 at par and also callable within 90 days of a regulatory capital treatment event. There are no put options. There is takeover protection.
The preferred stock is non-cumulative, but there is a dividend stopper, which prevents payment of dividends on common stock or junior securities for one dividend period, if dividends are not paid on the series E preferred stock, according to the preliminary prospectus.
Proceeds will be used for general corporate purposes, which may include supporting the asset growth of subsidiaries.
Huntington Bancshares is a Columbus, Ohio-based diversified regional bank holding company.
| Issuer: | Huntington Bancshares Inc.
|
| Issue: | Series E fixed-to-floating rate non-cumulative preferred stock
|
| Amount: | $500 million
|
| Maturity: | Perpetual
|
| Bookrunner: | Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Huntington Capital Markets
|
| Co-managers | Keefe, Bruyette & Woods, Inc., Sandler O’Neill & Partners, LP
|
| Dividend: | 5.7%, payable quarterly, until April 15, 2023 then Libor plus 288 bps
|
| Liquidation preference: | Par of $1,000 per depositary share
|
| Yield: | 5.7%
|
| Call: | On dividend dates starting April 15, 2023 at par or callable within 90 days of a regulatory capital treatment event
|
| Pricing date: | Feb. 27
|
| Settlement date: | March 6
|
| Expected ratings: | Moody’s: Baa3
|
| S&P: BB
|
| Fitch: BB
|
| Distribution: | Off shelf
|
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