By William Gullotti and Cristal Cody
Buffalo, N.Y., Feb. 27 – KeyCorp priced $1 billion series S fixed-to-floating rate senior notes due 2035 (Baa2/BBB/BBB+/DBRS: A) at 99.998 to yield 6.401% on Monday, according to an FWP and a 424B5 filed with the Securities and Exchange Commission and additional details from a market source.
The notes priced with a spread of 210 basis points over Treasuries, tight to initial talk in the Treasuries plus 235 bps area.
The coupon will be 6.401% for the fixed-rate period, converting to SOFR plus 242 bps on March 6, 2034. Interest for the floating-rate period is subject to a floor of 0%.
The notes are non-callable for the first 180 days. Starting Aug. 29, 2024, and up to March 6, 2034, they may be redeemed at a make-whole redemption price based on the Treasury rate plus 30 bps. They are callable at par on March 6, 2034 and on Dec. 6, 2034 and thereafter.
KeyBanc Capital Markets Inc., Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and RBC Capital Markets, LLC are the joint bookrunning managers. Passive bookrunners were BofA Securities, Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC.
Proceeds will be used for general corporate purposes.
KeyCorp is a Cleveland-based financial services company.
| Issuer: | KeyCorp
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| Amount: | $1 billion
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| Issue: | Fixed-to-floating rate senior notes, series S
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| Maturity: | March 6, 2035
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| Active bookrunners: | KeyBanc Capital Markets Inc., Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and RBC Capital Markets, LLC
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| Passive bookrunners: | BofA Securities, Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC
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| Co-managers: | Academy Securities, Inc. and CastleOak Securities, LP
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| Trustee: | Deutsche Bank Trust Co. Americas
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| Counsel to issuer: | Squire Patton Boggs (US) LLP and/or in-house counsel
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| Counsel to underwriters: | Sidley Austin LLP
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| Coupon: | 6.401% until March 6, 2034, then compounded SOFR plus 242 bps, subject to floor of 0%
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| Price: | 99.998
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| Yield: | 6.401%
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| Spread: | Treasuries plus 210 bps
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| Call options: | Non-callable for first 180 days; on or after Aug. 29, 2024 and up to March 6, 2034 with make-whole premium at Treasuries plus 30 bps; par call on March 6, 2034, then Dec. 6, 2034 and thereafter
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| Pricing date: | Feb. 26
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| Settlement date: | Feb. 28
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| Expected ratings: | Moody’s: Baa2
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| S&P: BBB
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| Fitch: BBB+
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| DBRS: A
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| Distribution: | SEC registered
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| Price talk: | Treasuries plus 235 bps area
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| Cusip: | 49326EEP4
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