8-KShareholder MattersCorporate ChangesOther Events+1

PNC FINANCIAL SERVICES GROUP, INC. 8-K Report, Rights Modification (Jul 27, 2011)

Filed July 27, 2011For Securities:PNC

Summary

PNC Financial Services Group, Inc. (PNC) filed an 8-K on July 27, 2011, to report the closing of its public offering of 1,000,000 depositary shares representing interests in its new Series O Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock. This offering provides PNC with additional capital and introduces a new class of preferred stock with specific dividend and liquidation rights. The Series O Preferred Stock ranks senior to common stock and equally with certain other existing preferred stock series, with dividend payments being non-cumulative. The Series O Preferred Stock features a fixed dividend rate of 6.75% per annum until August 1, 2021, after which it converts to a floating rate based on three-month LIBOR plus 3.678%. The stock has a liquidation preference of $100,000 per share ($1,000 per depositary share) and can be redeemed by PNC under specific conditions, including on or after August 1, 2021, or following a regulatory capital treatment event. This issuance is a strategic move to bolster the company's capital structure.

Key Highlights

  • 1PNC closed a public offering of 1,000,000 depositary shares, each representing a 1/100th interest in Series O Preferred Stock.
  • 2The Series O Preferred Stock is a new class of perpetual preferred stock with fixed-to-floating rate dividends.
  • 3Dividends on Series O Preferred Stock are non-cumulative.
  • 4The fixed dividend rate is 6.75% per annum until August 1, 2021; thereafter, it becomes a floating rate tied to LIBOR + 3.678%.
  • 5The Series O Preferred Stock has a liquidation preference of $100,000 per share ($1,000 per depositary share).
  • 6PNC has the option to redeem the Series O Preferred Stock on or after August 1, 2021, or upon a regulatory capital treatment event.
  • 7The Series O Preferred Stock ranks senior to common stock and on parity with certain other series of preferred stock.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the closing of PNC's public offering of 1,000,000 depositary shares, which represent interests in its newly established Series O Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock. This issuance is a means for PNC to raise capital and enhance its capital structure.

The Series O Preferred Stock pays non-cumulative cash dividends. For the initial period until August 1, 2021, it carries a fixed annual dividend rate of 6.75%. After this date, the dividend rate will become floating, calculated as three-month LIBOR plus 3.678% per annum. Dividends are payable only if declared by the Board of Directors.

The Series O Preferred Stock ranks senior to PNC's common stock. It ranks equally with outstanding Series B, K, and L Preferred Stock, and also equally with future preferred stock series (unless such future series is explicitly senior and approved by existing preferred stockholders). It ranks subordinate to any senior securities PNC may issue.

PNC can redeem the Series O Preferred Stock in whole or in part on any dividend payment date on or after August 1, 2021, at a price of $100,000 per share (plus any declared and unpaid dividends). Additionally, PNC can redeem the entire series within 90 days following a regulatory capital treatment event, also at $100,000 per share plus accrued dividends. Redemption requires prior approval from the Federal Reserve Board.