8-KMaterial AgreementsFinancial EventsOther Events

FIFTH THIRD BANCORP 8-K Report, Material Agreement (Feb 27, 2013)

Filed February 27, 2013For Securities:FITBFITBOFITBPFITB-PIFITB-PMFITB-PAFITBIFITB-PK

Summary

This 8-K filing by Fifth Third Bancorp (FITB) on February 27, 2013, primarily reports on the completion of a significant share repurchase transaction and the amendment and expansion of its global bank note program. The company announced the conclusion of an accelerated share repurchase agreement initiated in December 2012 with Credit Suisse, under which a total of approximately 6.4 million shares were repurchased for about $100 million. This action is part of a larger authorized share repurchase program, indicating a commitment to returning capital to shareholders. Additionally, Fifth Third Bank amended its global bank note program, increasing its aggregate issuance capacity from $20 billion to $25 billion. As part of this amended program, the bank offered for sale $1.3 billion in senior and subordinated unsecured bank notes with varying maturities and interest rates, including fixed-rate and floating-rate options. These issuances are a key component of the bank's funding strategy and capital management.

Key Highlights

  • 1Fifth Third Bancorp completed an accelerated share repurchase (ASR) transaction with Credit Suisse, repurchasing approximately 6.4 million shares for around $100 million.
  • 2The ASR was part of Fifth Third's previously announced 100 million share repurchase program.
  • 3Following this transaction, Fifth Third has 55 million shares remaining under its repurchase authority.
  • 4Fifth Third Bank amended its global bank note program, increasing the aggregate capacity to issue senior and subordinated unsecured bank notes from $20 billion to $25 billion.
  • 5The bank offered for sale $1.3 billion in aggregate principal amount of bank notes under the amended program.
  • 6The new bank note offerings include fixed-rate senior notes ($600 million of 1.45% 5-year notes and $400 million of 0.90% 3-year notes) and senior floating rate notes ($300 million).
  • 7These issuances are expected to settle on or about February 28, 2013.

Frequently Asked Questions

The primary purpose of the accelerated share repurchase transaction was to continue Fifth Third Bancorp's commitment to returning capital to shareholders as part of its previously authorized 100 million share repurchase program. This action reduces the number of outstanding shares.

The amendment to the global bank note program increased Fifth Third Bank's capacity to issue senior and subordinated unsecured bank notes from $20 billion to $25 billion, providing greater flexibility for its funding needs and capital management strategies.

Fifth Third Bank offered $1.3 billion in bank notes, consisting of $600 million in 1.45% senior fixed-rate notes due 2018, $400 million in 0.90% senior fixed-rate notes due 2016, and $300 million in senior floating-rate notes due 2016. The floating-rate notes are tied to 3-month USD LIBOR plus 41 basis points.

After accounting for the shares repurchased under the completed accelerated share repurchase transaction and considering shares delivered under an active contract, Fifth Third Bancorp has approximately 55 million shares of remaining repurchase authority under its previously announced share repurchase program.