8-KShareholder MattersCorporate ChangesOther Events+1

ALLSTATE CORP 8-K Report, Rights Modification (Mar 3, 2014)

Filed March 3, 2014For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

The Allstate Corporation (ALL) filed an 8-K on March 3, 2014, to report on two key events. First, the company established and issued Fixed Rate Noncumulative Perpetual Preferred Stock, Series E. This issuance introduces restrictions on future dividends and share repurchases for common stock and parity securities if dividends on the preferred stock are not paid. Second, the company closed a public offering of 26,000,000 Depositary Shares, representing interests in the newly issued Preferred Stock. This action is part of Allstate's capital management strategy and impacts the rights of existing common stockholders by prioritizing the preferred stockholders' dividends and liquidation preference.

Key Highlights

  • 1Allstate Corporation issued new Fixed Rate Noncumulative Perpetual Preferred Stock, Series E.
  • 2The issuance of Preferred Stock Series E imposes dividend and repurchase restrictions on common stock if preferred dividends are missed.
  • 3The company successfully closed a public offering of 26,000,000 Depositary Shares related to the Preferred Stock.
  • 4An over-allotment option for an additional 3,900,000 Depositary Shares is available to the underwriters.
  • 5The filing includes documentation such as the Certificate of Designations, Deposit Agreement, and forms of stock/depositary receipts.
  • 6This move impacts the capital structure and dividend policies of the company.

Frequently Asked Questions

The primary implication for common stockholders is that the company's ability to declare or pay dividends on, or repurchase, common stock is restricted if dividends on the Series E Preferred Stock are not paid for the preceding dividend period. This effectively prioritizes distributions to preferred stockholders.

The public offering of Depositary Shares was to distribute the newly issued Preferred Stock to investors in a more accessible format. Each Depositary Share represents an interest in one share of the Preferred Stock.

The Series E Preferred Stock is fixed rate, noncumulative, and perpetual. It has a liquidation preference of $25,000 per share and ranks senior to common stock in terms of dividend payments and liquidation.

The Certificate of Designations establishing the Preferred Stock was filed and became effective on February 27, 2014. The public offering of Depositary Shares closed on March 3, 2014.