8-KOther EventsExhibits & Filings

FIFTH THIRD BANCORP 8-K Report, Corporate Update (Mar 30, 2007)

Filed March 30, 2007For Securities:FITBFITBOFITBPFITB-PIFITB-PMFITB-PAFITBIFITB-PK

Summary

Fifth Third Bancorp (FITB) filed an 8-K on March 30, 2007, to report on a significant financing transaction. The company, through its trust Fifth Third Capital Trust IV, successfully sold $750 million of 6.50% Trust Preferred Securities. These securities represent an undivided beneficial interest in $750 million of 6.50% Junior Subordinated Notes due 2067 issued by Fifth Third Bancorp. This transaction effectively raised substantial capital for the bank and was completed on March 30, 2007. The filing also details key agreements related to this issuance. Fifth Third entered into an Underwriting Agreement with Goldman, Sachs & Co. and a First Supplemental Indenture with Wilmington Trust Company to govern the terms of the notes. Notably, the company has committed to a Replacement Capital Covenant (RCC) with its debt holders, restricting the repayment, redemption, or repurchase of these junior subordinated notes and trust preferred securities until at least April 1, 2047 (with potential extension to 2057), unless specific replacement capital is issued. This covenant provides a significant layer of long-term stability for this debt issuance.

Key Highlights

  • 1Fifth Third Bancorp completed the sale of $750 million in 6.50% Trust Preferred Securities on March 30, 2007.
  • 2These securities are backed by $750 million of 6.50% Junior Subordinated Notes due 2067 issued by Fifth Third Bancorp.
  • 3The transaction was facilitated through Fifth Third Capital Trust IV.
  • 4An Underwriting Agreement was executed with Goldman, Sachs & Co. as the underwriter representative.
  • 5A First Supplemental Indenture was entered into with Wilmington Trust Company, modifying terms for the Junior Subordinated Notes.
  • 6A Replacement Capital Covenant (RCC) was established, preventing redemption of the notes/securities before April 1, 2047 (or April 15, 2057), unless replacement capital is raised.
  • 7The company received a tax opinion from Alston & Bird LLP regarding the issuance.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report the completion of a significant financing transaction by Fifth Third Bancorp, involving the issuance and sale of $750 million of Trust Preferred Securities backed by Junior Subordinated Notes.

The Trust Preferred Securities represent an undivided beneficial interest in the Junior Subordinated Notes. Fifth Third Bancorp issued the Junior Subordinated Notes, which are then held by Fifth Third Capital Trust IV, and the Trust, in turn, issues the Trust Preferred Securities to investors. This structure is a common way for banks to raise capital that may qualify as Tier 1 capital.

The Replacement Capital Covenant (RCC) is a crucial commitment from Fifth Third Bancorp that restricts its ability to repay, redeem, or repurchase these specific debt instruments (the Junior Subordinated Notes and the Trust Preferred Securities) until at least April 1, 2047 (with a potential extension). This covenant provides long-term assurance to investors about the stability of this capital, making it more attractive and potentially lowering borrowing costs over the long term.

The Junior Subordinated Notes have a maturity date of 2067.