By Stephanie N. Rotondo
Seattle, Dec. 5 – KeyCorp priced $500 million of 6.125% series E fixed-to-floating rate noncumulative perpetual preferred stock (expected ratings: Baa3/BB+/BB) at par of $25.00 on Monday, according to a market source.
Price talk was in the 6.25% area. The deal was initially slated to be $250 million.
The preferreds will be issued as depositary shares representing a 1/40th interest.
Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC, Wells Fargo 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 389.2 basis points.
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 Cleveland-based bank holding company will use the 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 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.
| Issuer: | KeyCorp
|
| Securities: | Series E fixed-to-floating rate noncumulative preferred stock
|
| Amount: | $500 million, increased from $250 million
|
| Maturity: | Perpetual
|
| Bookrunners: | Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC, Wells Fargo Securities LLC, Goldman Sachs & Co., KeyBanc Capital Markets
|
| Dividend: | Fixed at 6.125% until Dec. 15, 2026, then floating at Libor plus 389.2 bps
|
| Price: | Par of $25
|
| Talk: | 6.25% area
|
| Call options: | On or after Dec. 15, 2026 or upon a regulatory capital treatment event at par plus accrued dividends
|
| Pricing date: | Dec. 5
|
| Settlement date: | Dec. 12
|
| Expected ratings: | Moody’s: Baa3
|
| S&P: BB+
|
| Fitch: BB
|
| Expected listing: | NYSE: KEYPI
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
