8-KShareholder MattersCorporate ChangesOther Events+1

ALLSTATE CORP 8-K Report, Rights Modification (Aug 5, 2019)

Filed August 5, 2019For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

Allstate Corporation (ALL) filed an 8-K report on August 5, 2019, detailing the upcoming issuance of its Fixed Rate Noncumulative Perpetual Preferred Stock, Series H. This filing primarily concerns the establishment of the Series H Preferred Stock, with a liquidation preference of $25,000 per share, and the associated underwriting agreement for its offering. The company is issuing 46,000,000 depositary shares, each representing a 1/1000th interest in a share of the Series H Preferred Stock. The key implication for investors is the potential impact of this new preferred stock issuance on Allstate's common stock. The terms of the Series H Preferred Stock impose restrictions on Allstate's ability to declare or pay dividends on, or repurchase, its common stock or any other equity ranking junior to or on parity with the Series H Preferred Stock if dividends on the Series H Preferred Stock are not paid. This filing serves to inform stakeholders about the terms and conditions of this new capital-raising instrument.

Key Highlights

  • 1Allstate Corporation is issuing Fixed Rate Noncumulative Perpetual Preferred Stock, Series H.
  • 2The Series H Preferred Stock has a liquidation preference of $25,000 per share.
  • 3The company will offer 46,000,000 depositary shares, with each representing a 1/1000th interest in a share of Series H Preferred Stock.
  • 4An underwriting agreement has been executed with several major financial institutions acting as representatives.
  • 5The issuance of Series H Preferred Stock introduces dividend restrictions on Allstate's common stock if dividends on the preferred stock are not paid.
  • 6A Certificate of Designations for the Series H Preferred Stock was filed with the Delaware Secretary of State, becoming effective upon filing.
  • 7The offering is registered under Allstate's Form S-3 registration statement.

Frequently Asked Questions

The primary purpose of the Series H Preferred Stock issuance is to raise capital for Allstate Corporation. The specific use of proceeds is not detailed in this 8-K, but preferred stock issuances are common for strengthening a company's balance sheet or funding general corporate purposes.

If Allstate fails to declare and pay (or set aside) dividends on the Series H Preferred Stock for the preceding dividend period, the company will be subject to restrictions on its ability to declare or pay dividends on, or purchase, redeem, or acquire shares of its common stock or any other equity junior to or on parity with the Series H Preferred Stock. This creates a priority for preferred stock dividends.

A depositary share is a security that represents a fraction of a share of a class of preferred stock. In this case, each depositary share represents a 1/1000th interest in one share of the Series H Preferred Stock. This structure is often used to make preferred stock more accessible to a wider range of investors.

The Series H Preferred Stock was expected to be issued on August 8, 2019, shortly after the filing of this 8-K report.