8-KShareholder MattersCorporate ChangesOther Events+1

CITIZENS FINANCIAL GROUP INC/RI 8-K Report, Rights Modification (May 24, 2018)

Filed May 24, 2018For Securities:CFGCFG-PHCFG-PECFG-PI

Summary

Citizens Financial Group, Inc. (CFG) filed an 8-K on May 24, 2018, primarily to disclose material modifications to the rights of security holders due to the issuance of its new 6.000% Fixed-To-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B. This issuance imposes restrictions on the company's ability to declare dividends or repurchase common stock and other junior securities if dividends on the Series B Preferred Stock are not paid. Additionally, partial dividend payments on parity preferred stock are limited. The filing also confirms the establishment of the Series B Preferred Stock's terms through a Certificate of Designations filed with Delaware's Secretary of State. This 8-K also serves to file the Underwriting Agreement related to the public offering of 300,000 shares of this new preferred stock and related legal opinions as exhibits, fulfilling requirements for its S-3 registration statement. Investors should note the potential impact on common stock dividend capacity and share repurchases stemming from the preferred stock issuance.

Key Highlights

  • 1Citizens Financial Group (CFG) issued new 6.000% Fixed-To-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B.
  • 2Issuance of Series B Preferred Stock imposes restrictions on CFG's ability to pay dividends or repurchase common stock if preferred dividends are not met.
  • 3The Certificate of Designations outlining the terms and preferences of the Series B Preferred Stock has been officially filed.
  • 4CFG entered into an Underwriting Agreement for the public offering of 300,000 shares of the Series B Preferred Stock.
  • 5This 8-K filing incorporates by reference key documents, including the Underwriting Agreement and the Certificate of Designations, into CFG's S-3 registration statement.
  • 6Legal opinions regarding the issuance and sale of the Series B Preferred Stock have been filed as exhibits.

Frequently Asked Questions

The main purpose of this 8-K filing is to formally report the material modifications to the rights of security holders resulting from the issuance of the new Series B Preferred Stock. It also serves to file important related documents like the Underwriting Agreement and the Certificate of Designations.

The issuance of the Series B Preferred Stock introduces restrictions. If CFG fails to declare and pay dividends on the Series B Preferred Stock for a preceding dividend period, the company's ability to declare or pay dividends on, or repurchase, its common stock and other junior securities will be restricted.

The Series B Preferred Stock has a fixed-to-floating rate with a coupon of 6.000%. It is non-cumulative and perpetual, with a par value of $25.00 per share and a liquidation preference of $1,000 per share. The Certificate of Designations details its specific preferences, limitations, and relative rights.

The filing of the Underwriting Agreement demonstrates the terms and conditions under which CFG is offering 300,000 shares of its Series B Preferred Stock to the public. This includes details on representations, warranties, conditions to closing, and indemnification, providing transparency for investors in the offering.