8-KSecurities & ListingShareholder MattersCorporate Changes+2

CITIZENS FINANCIAL GROUP INC/RI 8-K Report, Unregistered Securities Sale (Apr 6, 2015)

Filed April 6, 2015For Securities:CFGCFG-PHCFG-PECFG-PI

Summary

Citizens Financial Group, Inc. (CFG) filed an 8-K on April 6, 2015, reporting on the completion of a private offering of 250,000 shares of its 5.500% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series A. This preferred stock was issued at $1,000 per share under Rule 144A and Regulation S, raising capital for the company. The offering aims to strengthen the company's capital structure and likely supports its strategic initiatives following its separation from The Royal Bank of Scotland Group. The Series A Preferred Stock carries a dividend rate that starts fixed at 5.500% until April 6, 2020, and then converts to a floating rate based on three-month LIBOR plus a spread of 3.960%. Dividends are non-cumulative and payable quarterly after the initial period, subject to declaration by the Board of Directors and certain regulatory restrictions. The company has the option to redeem the preferred stock on or after April 6, 2020, or under specific regulatory capital change conditions. The filing also notes that the company's ability to pay dividends on or repurchase junior stock, including common stock, is restricted if it fails to pay dividends on the Series A Preferred Stock.

Key Highlights

  • 1Citizens Financial Group completed a private offering of 250,000 shares of Series A Preferred Stock at $1,000 per share.
  • 2The offering raised $250 million in capital for the company.
  • 3The Series A Preferred Stock has a fixed dividend rate of 5.500% for the first five years, transitioning to a floating rate thereafter (3-month LIBOR + 3.960%).
  • 4Dividends on the Series A Preferred Stock are non-cumulative and subject to declaration by the Board of Directors.
  • 5CFG has the option to redeem the preferred stock starting April 6, 2020, or under specific regulatory conditions.
  • 6Restrictions are imposed on payments to junior stock holders (including common stock) if preferred stock dividends are not met.

Frequently Asked Questions

This 8-K filing announces the completion of Citizens Financial Group's private offering of Series A Preferred Stock. It details the terms of this new preferred stock issuance, including the amount raised, dividend structure, redemption options, and its impact on the company's capital structure.

Citizens Financial Group raised $250 million from this offering, selling 250,000 shares of Series A Preferred Stock at $1,000 per share.

The Series A Preferred Stock pays dividends at a fixed rate of 5.500% per annum until April 6, 2020. After this date, the dividend rate becomes floating, equal to three-month U.S. dollar LIBOR plus 3.960%. These dividends are non-cumulative and payable only if declared by the Board of Directors.

Yes, the filing indicates that the company's ability to pay dividends on or repurchase its junior stock, which includes its common stock, is restricted if it fails to declare and pay full dividends on the Series A Preferred Stock. This prioritizes payments to preferred shareholders.