Summary
Fifth Third Bancorp (FITB) filed an 8-K on July 9, 2012, to announce the redemption of its 7.25% Trust Preferred Securities issued by Fifth Third Capital Trust VI. The principal amount of these securities is $862,500,000, and the redemption date is set for August 8, 2012. The company states that the redemption is funded by excess cash and is triggered by a "Capital Treatment Event." This Capital Treatment Event stems from proposed rulemaking by federal banking regulators regarding Section 171 of the Dodd-Frank Act. Specifically, the proposed rules address the cessation of Tier 1 capital treatment for outstanding trust preferred securities. This regulatory development has provided Fifth Third Bancorp with the option to call these securities within 90 days.
Key Highlights
- 1Fifth Third Bancorp is redeeming $862,500,000 in 7.25% Trust Preferred Securities.
- 2The redemption is scheduled for August 8, 2012.
- 3The securities being redeemed were issued by Fifth Third Capital Trust VI.
- 4The redemption is a result of a "Capital Treatment Event" as defined in the securities' terms.
- 5The Capital Treatment Event is linked to proposed federal regulatory changes concerning trust preferred securities' Tier 1 capital treatment under the Dodd-Frank Act.
- 6The redemption will be funded by excess cash on hand at the company.