New Issue: Charles Schwab prices $2.35 billion fixed-to-floaters and senior notes in two parts

By Wendy Van Sickle

Columbus, Ohio, Aug. 22 – Charles Schwab Corp. priced $2.35 billion of fixed-to-floating rate and fixed-rate senior notes (expected: A2/A-/A) on Tuesday, according to an FWP filed with the Securities and Exchange Commission.

The $1 billion of 5.875% senior notes due Aug. 24, 2026 priced at 99.916 to yield 5.906%, or a spread of 115 basis points over Treasuries. The notes are callable starting Feb. 20, 2024 at a make-whole amount of Treasuries plus 20 bps and are callable at par starting July 24, 2026.

The $1.35 billion of fixed-to-floaters due Aug. 24, 2034 will bear interest at a fixed rate of 6.136% initially and will transition to SOFR plus a margin of 201 bps on Aug. 24, 2033 and will reset quarterly. The notes priced at par with a 180 bps spread to Treasuries. The fixed-to-floaters are callable starting Feb. 20, 2024 at a make-whole of Treasuries plus 30 bps and are callable at par starting May 24, 2034.

BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC are the bookrunners.

Proceeds will be used for general corporate purposes, including purchasing securities and supporting business growth.

Schwab is a Westlake, Tex.-based savings and loan holding company that engages, through its subsidiaries, in wealth management, securities brokerage, banking, asset management, custody, and financial advisory services.

Issuer:	Charles Schwab Corp.
Amount:	$2.35 billion
Bookrunners:	BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC
Senior co-managers:	Barclays and UBS Securities LLC
Co-managers:	BNY Capital Markets LLC, PNC Capital Markets LLC and U.S. Bancorp Investments, Inc.
Trustee:	Bank of New York Mellon Trust Co., NA
Counsel to issuer:	In-house counsel and Wachtell, Lipton, Rosen & Katz (New York and Delaware law)
Counsel to underwriters:	Simpson Thacher & Bartlett LLP
Pricing date:	Aug. 22
Settlement date:	Aug. 24
Expected ratings:	Moody’s: A2
	S&P: A-
	Fitch: A
Fixed-rate notes
Amount:	$1 billion
Issue:	Senior notes
Maturity:	Aug. 24, 2026
Coupon:	5.875%
Price:	99.916
Yield:	5.906%
Spread:	Treasuries plus 115 bps
Call:	Starting Feb. 20, 2024 at make-whole amount of Treasuries plus 20 bps and at par starting July 24, 2026
Cusip:	808513CG8
Fixed-to-floating notes
Amount:	$1.35 billion
Issue:	Fixed-to-floating rate senior notes
Maturity:	Aug. 24, 2034
Coupon:	6.136% until Aug. 24, 2033, then SOFR plus 201 bps, resetting quarterly
Price:	Par
Yield:	6.136%
Spread:	Treasuries plus 180 bps
Call:	Starting Feb. 20, 2024 at make-whole of Treasuries plus 30 bps and at par starting May 24, 2034
Cusip:	808513CH6

© 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.