8-KOther EventsExhibits & Filings

CITIZENS FINANCIAL GROUP INC/RI 8-K Report, Corporate Update (Feb 11, 2021)

Filed February 11, 2021For Securities:CFGCFG-PHCFG-PECFG-PI

Summary

Citizens Financial Group, Inc. (CFG) announced the completion of its previously announced offers to exchange various series of its subordinated notes due 2022, 2024, and 2025 (the "Old Notes") for new series of subordinated notes due 2031 (the "New Notes"). This exchange effectively refinances a portion of CFG's outstanding subordinated debt, replacing older notes with newer ones that have a reset feature. The company successfully exchanged a significant aggregate principal amount of Old Notes across multiple series, including substantial portions of its 4.300% and 4.350% notes, demonstrating proactive debt management. This initiative allows CFG to extend its debt maturity profile and potentially optimize its capital structure. The New Notes issued carry fixed interest rates until February 2026, after which they will reset to a floating rate based on the Five-Year U.S. Treasury Rate plus a spread. The company also incurred minor cash consideration and accrued interest costs associated with these exchanges. Investors should note the ongoing principal amounts of the Old Notes that remain outstanding, as well as the terms and conditions of the newly issued New Notes, including their reset interest rate mechanism.

Key Highlights

  • 1Citizens Financial Group (CFG) successfully completed exchange offers for several series of its subordinated notes on February 11, 2021.
  • 2The company replaced older subordinated notes with new fixed-rate reset subordinated notes due 2031.
  • 3Significant principal amounts of various "Old Notes" were tendered and cancelled, including over $113 million of 4.300% Old Notes and over $60 million of 4.350% Old Notes.
  • 4New subordinated notes totaling approximately $264 million in aggregate principal amount were issued in exchange.
  • 5The new notes feature fixed interest rates until February 11, 2026, after which the rates will reset to a floating mechanism tied to U.S. Treasury rates.
  • 6CFG incurred costs related to additional cash consideration and accrued interest for the successful exchanges.
  • 7Several series of "Old Notes" remain outstanding following the exchange offers, with updated principal amounts detailed in the filing.

Frequently Asked Questions

The primary purpose of the exchange offers was to refinance a portion of Citizens Financial Group's outstanding subordinated debt. By exchanging older subordinated notes for newer ones maturing in 2031, the company aimed to extend its debt maturity profile and potentially optimize its capital structure.

The new notes issued by CFG (4.300% New Notes, 3.750% New Notes, and 4.350% New Notes) have fixed interest rates until February 11, 2026. After this 'Reset Date,' the interest rate will become a floating rate, calculated as the Five-Year U.S. Treasury Rate plus a spread of 2.5%. These new notes are due in 2031.

Citizens Financial Group exchanged a substantial aggregate principal amount of its old subordinated notes. Notably, over $113 million of the 4.300% Old Notes, over $68 million of the 3.750% Old Notes, and over $60 million of the 4.350% Old Notes were accepted and cancelled.

These exchange offers resulted in the cancellation of significant principal amounts of older subordinated debt and the issuance of new subordinated debt with a later maturity date. This effectively extends the company's average debt maturity and reshapes its debt profile by introducing notes with a future floating interest rate component.