Summary
Capital One Financial Corporation (COF) announced on November 16, 2012, its intention to redeem several series of trust preferred capital securities. This action is a direct response to Section 171 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which mandates a phase-out of Tier 1 capital credit for trust preferred securities starting January 1, 2013. The redemptions are scheduled to occur on January 2, 2013. Investors holding these specific securities should note that they will receive the principal amount plus any accrued and unpaid distributions. Some securities will be redeemed at par (100%), while others will be redeemed at a premium (ranging from 101.9035% to 102.451%) depending on the specific terms of their respective redemption provisions and the nature of the event triggering the redemption (e.g., capital treatment event or optional redemption).
Key Highlights
- 1Capital One is redeeming multiple series of trust preferred capital securities on January 2, 2013.
- 2The redemption is driven by the Dodd-Frank Act's phase-out of Tier 1 capital treatment for trust preferred securities.
- 3Holders of these securities will receive the principal amount plus accrued distributions.
- 4Several specific series of Capital One Capital Trust securities are named, along with Coastal Capital Trust II, North Fork Capital Trust II, and Reliance Capital Trust I securities.
- 5Redemption prices vary: some at par (100%), others at a premium (up to 102.451%) based on redemption provisions.
- 6The announcement was made via a press release filed as an exhibit to the 8-K.