By Cristal Cody
Chicago, July 26 – Truist Financial Corp. sold $2.5 billion of fixed-to-floating rate notes in two parts on Monday, according to FWP filings with the Securities and Exchange Commission and additional details from a market source.
Allocations were heavier for the $1.5 billion of 4.26% senior notes due 2026 (A3/A-/A/DBRS: A(high)). The series starts with a fixed coupon that converts to a floating rate in the final year of SOFR plus 145.6 basis points.
For the senior notes due July 2026, the issuer may call the notes starting 180 days after the issue date until July 28, 2025 with a Treasuries plus 20 bps make-whole premium. There will be an optional redemption at par on July 28, 2025 and then again starting in the final month.
The notes priced at par and with a spread of 128 bps to the benchmark Treasury rate. Price talk was in the Treasuries plus 150 bps area.
The second part of the deal priced as $1 billion of fixed-to-floating rate subordinated notes due in 2033 (A3/BBB+/A-/DBRS: A).
The notes start with a 4.916% coupon that converts to SOFR plus 224 bps starting July 28, 2032.
The notes can be redeemed early at par on the reset date and then again at any time in the last three months before the maturity date.
The subordinated notes priced at par with a spread over Treasuries of 210 bps versus talk in the 230 bps area.
The joint bookrunners are Truist Securities, Inc., BofA Securities, Inc. and Morgan Stanley & Co. LLC.
Proceeds from the senior notes will be used for general corporate purposes, which may include acquisitions, repurchasing shares, repaying of maturing obligations and refinancing outstanding debt and extending credit to, or funding investments in, the issuer’s subsidiaries.
Proceeds from the subordinated notes will be used to increase tier 2 capital and for general corporate purposes.
Truist is a Charlotte, N.C.-based bank holding company.
| Issuer: | Truist Financial Corp.
|
| Amount: | $2.5 billion
|
| Bookrunners: | Truist Securities, Inc., BofA Securities, Inc. and Morgan Stanley & Co. LLC
|
| Co-managers: | CastleOak Securities LP and C.L. King & Associates Inc.
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| Trustee: | U.S. Bank Trust Co., NA
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| Counsel to issuer: | In-house counsel and Squire Patton Boggs (US) LLP
|
| Counsel to underwriters: | Sidley Austin LLP
|
| Trade date: | July 25
|
| Settlement date: | July 28
|
| Distribution: | SEC registered
|
|
|
| Senior notes
|
| Amount: | $1.5 billion
|
| Issue: | Fixed-to-floating rate senior notes
|
| Maturity: | July 28, 2026
|
| Coupon: | 4.26% starting rate; converts to SOFR plus 145.6 bps on July 28, 2025
|
| Price: | Par
|
| Yield: | 4.26%
|
| Spread: | Treasuries plus 128 bps
|
| Call features: | Starting after 180 days until July 28, 2025 with Treasuries plus 20 bps make-whole premium; callable at par on July 28, 2025; callable at par starting June 28, 2026
|
| Ratings: | Moody’s: A3
|
| S&P: A-
|
| Fitch: A
|
| DBRS: A (high)
|
| Price talk: | Treasuries plus 150 bps area
|
| Cusip: | 89788MAH5
|
|
|
| Subordinated notes
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| Amount: | $1 billion
|
| Issue: | Fixed-to-floating rate subordinated notes
|
| Maturity: | July 28, 2033
|
| Coupon: | 4.916% starting rate; converts to SOFR plus 224 bps on July 28, 2032
|
| Price: | Par
|
| Yield: | 4.916%
|
| Spread: | Treasuries plus 210 bps
|
| Call features: | At par on July 28, 2032; at par starting April 28, 2033
|
| Ratings: | Moody’s: A3
|
| S&P: BBB+
|
| Fitch: A-
|
| DBRS: A
|
| Price talk: | Treasuries plus 230 bps area
|
| Cusip: | 89788NAA8
|
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