8-KShareholder MattersCorporate ChangesOther Events+1

PNC FINANCIAL SERVICES GROUP, INC. 8-K Report, Rights Modification (Aug 19, 2022)

Filed August 19, 2022For Securities:PNC

Summary

PNC Financial Services Group, Inc. (PNC) has filed an 8-K report detailing the establishment and public offering of its new 6.200% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series V. This new series of preferred stock, represented by 1,250,000 depositary shares, was issued to raise capital and enhance PNC's capital structure. The stock is designed with specific dividend and liquidation preferences, ranking senior to common stock and on par with other existing preferred stock series. The Series V Preferred Stock features a fixed dividend rate of 6.200% for the first five years, after which the rate will reset based on the 5-year U.S. Treasury rate plus a spread of 3.238%. Importantly, these dividends are non-cumulative, meaning missed payments do not accrue. The stock has a liquidation preference of $100,000 per share and is perpetual, with redemption options available under specific circumstances, including a potential Regulatory Capital Treatment Event.

Key Highlights

  • 1PNC has issued 1,250,000 depositary shares representing its new 6.200% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series V.
  • 2The Series V Preferred Stock carries a fixed dividend rate of 6.200% until September 15, 2027, after which it becomes a floating rate.
  • 3The dividend rate will reset every five years, based on the 5-year U.S. Treasury rate plus a spread of 3.238%.
  • 4Dividends are non-cumulative, meaning any missed dividend payments will not be carried forward.
  • 5The Series V Preferred Stock ranks senior to PNC's common stock and equally with other existing parity preferred stock series.
  • 6The stock has a liquidation preference of $100,000 per share and is perpetual, with no maturity date.
  • 7PNC has the option to redeem the Series V Preferred Stock, particularly after the initial five-year period or in the event of a Regulatory Capital Treatment Event.

Frequently Asked Questions

The primary purpose of this 8-K filing is to inform investors about the creation and public offering of PNC's new Series V Preferred Stock. It details the terms, rights, and preferences associated with this new class of stock, which is intended to strengthen PNC's capital base.

The Series V Preferred Stock pays a fixed dividend of 6.200% annually until September 15, 2027. After this date, the dividend rate will reset every five years to the then-current 5-year U.S. Treasury rate plus a spread of 3.238%. It's important to note that these dividends are non-cumulative, meaning that if PNC does not declare a dividend for a particular period, that dividend is forfeited and will not be paid later.

The Series V Preferred Stock has a liquidation preference of $100,000 per share (or $1,000 per depositary share). In the event of PNC's liquidation, dissolution, or winding up, holders of this preferred stock are entitled to receive this amount, plus any declared and unpaid dividends, before any distribution is made to common stockholders. This preference is subordinate to liabilities to depositors and creditors and any securities ranking senior to the Series V Preferred Stock.

Yes, PNC has the option to redeem the Series V Preferred Stock. Redemption can occur in whole or in part on any dividend payment date on or after September 15, 2027, at a price of $100,000 per share plus accrued and unpaid dividends. Additionally, PNC can redeem the entire series within 90 days following a 'Regulatory Capital Treatment Event' at a specified redemption price.