8-KShareholder MattersCorporate ChangesOther Events+1

CITIZENS FINANCIAL GROUP INC/RI 8-K Report, Rights Modification (Oct 28, 2019)

Filed October 28, 2019For Securities:CFGCFG-PHCFG-PECFG-PI

Summary

Citizens Financial Group, Inc. (CFG) filed an 8-K on October 28, 2019, detailing the issuance and terms of its 5.000% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series E. This filing is significant as it introduces new preferred stock that impacts the company's ability to pay dividends on and repurchase its common stock and other junior securities. Specifically, if CFG fails to pay dividends on the Series E Preferred Stock for a preceding dividend period, it will face restrictions on common stock dividend payments and repurchases. The report also outlines the underwriting agreement for the public offering of depositary shares, each representing a fraction of a Series E Preferred Stock share. This transaction diversifies CFG's capital structure and provides a new class of securities for investors. The terms of the Series E Preferred Stock, including these dividend and repurchase restrictions, are detailed in the Certificate of Designations, which has been filed and incorporated by reference.

Key Highlights

  • 1CFG issued 5.000% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series E, on October 28, 2019.
  • 2Issuance of Series E Preferred Stock imposes dividend and repurchase restrictions on CFG's common stock and other junior securities.
  • 3Restrictions apply if dividends on Series E Preferred Stock are not declared and paid (or set aside) for the preceding dividend period.
  • 4A public offering of depositary shares, each representing a 1/40th interest in a share of Series E Preferred Stock, was conducted.
  • 5An underwriting agreement with multiple major financial institutions was executed for the depositary share offering.
  • 6The terms and preferences of the Series E Preferred Stock are formally established through a Certificate of Designations filed with Delaware.
  • 7The filing includes various exhibits detailing the underwriting agreement, certificate of designations, deposit agreement, and legal opinions.

Frequently Asked Questions

If Citizens Financial Group, Inc. does not declare and pay (or set aside) dividends on the Series E Preferred Stock for the last preceding dividend period, the company's ability to declare or pay dividends on its common stock and any other stock ranking junior to the Series E Preferred Stock will be restricted.

The Series E Preferred Stock has a fixed dividend rate of 5.000% per annum.

Similar to dividend payments, if CFG fails to pay dividends on the Series E Preferred Stock for the preceding dividend period, its ability to purchase, redeem, or otherwise acquire shares of its common stock or any stock ranking junior to the Series E Preferred Stock will be restricted.

Depositary shares are securities that represent a fraction of an interest in a share of a company's preferred stock. In this case, each depositary share represents a 1/40th interest in a share of CFG's Series E Preferred Stock, making it easier for a wider range of investors to participate in the preferred stock offering.