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KeyCorp offers $250 million fixed-to-floating noncumulative preferreds; price talk around 6.25%
By Stephanie N. Rotondo
Seattle, Dec. 5 – KeyCorp is offering $250 million of series E fixed-to-floating rate noncumulative perpetual preferred stock (expected ratings: Baa3/BB+/BB), according to a prospectus filed with the Securities and Exchange Commission on Monday.
Price talk is in the 6.25% area, a market source reported.
The preferreds will be issued as depositary shares representing a 1/40th interest.
Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC, Goldman Sachs & Co. and KeyBanc Capital Markets are the joint bookrunners.
Dividends will be fixed through Dec. 15, 2026. At that point, the securities will float at Libor plus a spread.
The issue becomes redeemable on or after Dec. 15, 2026 at par plus accrued dividends. The preferreds can also be redeemed in whole upon a regulatory capital treatment event.
The new securities will be listed on the New York Stock Exchange under the ticker symbol “KEYPI.”
The Cleveland-based bank holding company will use proceeds for general corporate purposes, which may include working capital, capital expenditures, investments in or loans to subsidiaries, refinancing of outstanding debt, refinancing of outstanding capital securities, share repurchases – including, but not limited to, repurchases of our common stock or preferred stock – the potential redemption of outstanding $350 million aggregate liquidation preference of series C fixed-to-floating rate perpetual noncumulative preferred stock – which becomes redeemable on Feb. 15, 2017 – dividends, funding potential future acquisitions and satisfaction of other obligations.
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