8-KShareholder MattersCorporate ChangesOther Events+1

CITIZENS FINANCIAL GROUP INC/RI 8-K Report, Rights Modification (Jun 11, 2021)

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

Summary

Citizens Financial Group, Inc. (CFG) filed an 8-K on June 11, 2021, detailing the issuance of its new 4.000% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series G. This issuance introduces restrictions on the company's ability to pay dividends or repurchase common stock if dividends on the Series G Preferred Stock are not paid. The filing also outlines that partial dividend payments on parity preferred stock would be limited if full dividends are not paid on Series G. This strategic move signals the company's intent to bolster its capital structure. Investors should note the implications of these new preferred stock terms, particularly regarding the potential impact on future common stock dividend payments and share repurchases, which are now subordinate to meeting the obligations of the Series G Preferred Stock. The filing includes the Certificate of Designations and the Underwriting Agreement related to the public offering of 300,000 shares of this new preferred stock.

Key Highlights

  • 1Citizens Financial Group (CFG) issued 4.000% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series G.
  • 2Issuance of Series G Preferred Stock introduces dividend restrictions on common stock and other junior securities if Series G dividends are not met.
  • 3Dividends on preferred stock ranking equally with Series G may be limited if partial dividends are paid on Series G.
  • 4The company entered into an Underwriting Agreement for the public offering of 300,000 shares of Series G Preferred Stock.
  • 5The Certificate of Designations establishing the terms of the Series G Preferred Stock was filed with the Delaware Secretary of State.
  • 6This issuance is part of CFG's efforts to manage its capital structure.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce and provide details regarding the issuance of Citizens Financial Group's new 4.000% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series G, including the associated terms and conditions.

The Series G Preferred Stock introduces a restriction: if CFG fails to declare and pay dividends on the Series G Preferred Stock for a dividend period, it cannot declare or pay dividends on, or repurchase, its common stock or other junior securities. This means common stockholders' ability to receive dividends or benefit from share buybacks is now subordinate to the preferred stock dividend obligations.

The "Fixed-Rate Reset" indicates that the preferred stock will pay a fixed dividend rate for an initial period, after which the rate will reset periodically based on prevailing market interest rates. The current filing specifies a 4.000% initial fixed rate.

The Underwriting Agreement outlines the terms and conditions under which investment banks (Barclays Capital Inc., BofA Securities, Inc., J.P. Morgan Securities LLC, and Morgan Stanley & Co. LLC) agreed to purchase and sell 300,000 shares of the Series G Preferred Stock to the public, signaling the successful completion of the offering.