By Rebecca Melvin and Cristal Cody
Concord, N.H., May 17 – KeyCorp priced $1.35 billion series Q fixed-to-floating rate senior notes (Baa1/BBB+/A-/DBRS: A) in tranches due 2025 and 2033 on Monday, according to two FWP filings with the Securities and Exchange Commission and additional details from a market source.
The bank priced $600 million of 3.878% notes due 2025 at par to yield Treasuries plus 130 basis points, tighter than spread talk in the 150 bps area. The coupon will be fixed until May 23, 2024 and then will float at compounded SOFR plus 125 bps.
The notes are redeemable after six months and before Feb. 23, 2024 at a make-whole redemption price based on the Treasury rate plus 20 bps. They become are callable at par on May 23, 2024 and on Feb. 23, 2025 and thereafter.
The lender also priced $750 million of 4.789% notes due 2033 at par to yield 190 bps over Treasuries, tighter than talk in the Treasuries plus 215 bps area. The coupon will be fixed until June 1, 2032 and then will float at compounded SOFR plus 206 bps.
The notes are redeemable after six months and before June 1, 2032 at a make-whole redemption price based on the Treasury rate plus 30 bps. They become callable at par on June 1, 2032 and on March 1, 2033 and thereafter.
KeyBanc Capital Markets Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and RBC Capital Markets, LLC are the active bookrunners. Passive bookrunners were J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.
Proceeds will be used for general corporate purposes.
KeyCorp is a Cleveland-based financial services company.
| Issuer: | KeyCorp
|
| Amount: | $1.35 billion
|
| Issue: | Fixed-to-floating rate senior notes (series Q)
|
| Active bookrunners: | KeyBanc Capital Markets Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and RBC Capital Markets, LLC
|
| Passive bookrunners: | J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC
|
| Co-managers: | American Veterans Group, PBC, C.L. King & Associates, Inc., Great Pacific Securities and MFR Securities, Inc.
|
| Trustee: | Deutsche Bank Trust Co. Americas
|
| Counsel to issuer: | Squire Patton Boggs (US) LLP
|
| Counsel to underwriters: | Sidley Austin LLP
|
| Pricing date: | May 16
|
| Settlement date: | May 23
|
| Expected ratings: | Moody’s: Baa1
|
| S&P: BBB+
|
| Fitch: A-
|
| DBRS: A
|
| Distribution: | SEC registered
|
|
|
| 2025 notes
|
| Amount: | $600 million
|
| Maturity: | May 23, 2025
|
| Coupon: | 3.878% until May 23, 2024, then compounded SOFR plus 125 bps
|
| Price: | Par
|
| Yield: | 3.878%
|
| Spread: | Treasuries plus 130 bps
|
| Call: | After six months but before May 23, 2024 for a make-whole of Treasuries plus 20 bps, on May 23, 2024 at par and beginning Feb. 23, 2025 and thereafter at par
|
| Price talk: | Treasuries plus 150 bps area
|
| Cusip: | 49326EEL3
|
|
|
| 2033 notes
|
| Amount: | $750 million
|
| Maturity: | June 1, 2033
|
| Coupon: | 4.789% until June 1, 2032, then compounded SOFR plus 206 bps
|
| Price: | Par
|
| Yield: | 4.789%
|
| Spread: | Treasuries plus 190 bps
|
| Call: | After six months but before June 1, 2032 for a make-whole of Treasuries plus 30 bps; on June 1, 2032 at par and beginning March 1, 2033 and thereafter at par
|
| Price talk: | Treasuries plus 215 bps area
|
| Cusip: | 49326EEN9
|
|
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