New Issue: Charles Schwab prices $2.5 billion fixed-to-floaters due 2029, 2034

By Mary-Katherine Stinson and Cristal Cody

Lexington, Ky., May 18 – Charles Schwab Corp. priced a two-part offering of fixed-to-floating rate senior notes (A2/A-/A) on Wednesday, according to an FWP filed with the Securities and Exchange Commission.

The $1.2 billion of 5.643% notes due May 19, 2029 priced at par, or at Treasuries plus 205 basis points. Price talk was in the Treasuries plus 230 bps area, a source noted.

The $1.3 billion of 5.853% notes due May 19, 2034 priced at par, or at Treasuries plus 227 bps. Talk was in the 255 bps area.

The notes’ initial fixed interest rate will transition to SOFR plus a margin on the interest reset date, one year before each maturity date. On May 19, 2028 the 2029 notes’ interest rate will convert to SOFR plus 221 bps and on May 19, 2033 the 2034 notes’ interest rate will convert to SOFR plus 250 bps.

Both notes have make-whole call redemption options beginning Nov. 15 through their respective reset dates, at Treasuries plus 35 bps. The notes are callable in whole at par on the reset dates and then again subject to a potential par call one month before the maturity date for the 2029 notes, on or after April 19, 2029, and three months before the maturity date for the 2034 notes, on or after Feb. 19, 2034.

BofA Securities, Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are the bookrunners.

Proceeds will be used for general corporate purposes, including investments in subsidiaries and supporting business growth.

Schwab is a Westlake, Tex.-based savings and loan holding company.

Issuer:	Charles Schwab Corp.
Amount:	$2.5 billion
Issue:	Fixed-to-floating rate senior notes
Bookrunners:	BofA Securities, Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities, LLC
Senior co-managers:	Barclays and Morgan Stanley & Co. LLC
Co-managers:	BNY Mellon Capital Markets, LLC, PNC Capital Markets LLC and U.S. Bancorp Investments, Inc.
Trustee:	Bank of New York Mellon Co., NA
Counsel to issuer:	In-house counsel and Wachtell, Lipton, Rosen & Katz (New York and Delaware law)
Counsel to bookrunners:	Simpson Thacher & Bartlett LLP
Pricing date:	May 17
Settlement date:	May 19
Ratings:	Moody’s: A2
	S&P: A-
	Fitch: A
2029 notes
Amount:	$1.2 billion
Maturity:	May 19, 2029
Coupon:	5.643% initially, converts to SOFR plus 221 bps on May 19, 2028
Price:	Par
Yield:	5.643%
Spread:	Treasuries plus 205 bps
Call features:	Beginning Nov. 15 through May 19, 2028 at Treasuries plus 35 bps; in whole at par on May 19, 2028; at par beginning April 19, 2029
Price talk:	Treasuries plus 230 bps area
Cusip:	808513CD5
2034 notes
Amount:	$1.3 billion
Maturity:	May 19, 2034
Coupon:	5.853% initially, converts to SOFR plus 250 bps on May 19, 2033
Price:	Par
Yield:	5.853%
Spread:	Treasuries plus 227 bps
Call features:	Beginning Nov. 15 through May 19, 2033; in whole at par on May 19, 2033; at par beginning Feb. 19, 2034
Price talk:	Treasuries plus 255 bps area
Cusip:	808513CE3

© 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.