Summary
PNC Financial Services Group, Inc. (PNC) has filed an 8-K report detailing the establishment and offering of its new 6.250% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series W. This new series of preferred stock, represented by depositary shares, ranks senior to the company's common stock and equally with other outstanding parity preferred stock. The issuance is a move to bolster capital and potentially offers investors a fixed income stream, initially at a 6.250% annual rate, which will reset every seven years based on the seven-year U.S. Treasury rate plus a spread of 2.808%. The Series W Preferred Stock is perpetual, meaning it has no maturity date and can be redeemed at PNC's option under specific conditions. The report also outlines restrictions on dividends and distributions to common stock and junior/parity preferred stock if dividends on the Series W Preferred Stock are not declared, highlighting the priority of this new preferred security. Investors should note the non-cumulative nature of the dividends, meaning missed dividends are not paid later.
Key Highlights
- 1Establishment of 6.250% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series W.
- 2Issuance of 1,500,000 Depositary Shares, each representing a 1/100th interest in a Series W Preferred Stock share.
- 3Series W Preferred Stock ranks senior to common stock and equally with other parity preferred stock.
- 4Initial fixed dividend rate of 6.250% per annum, resetting every seven years based on U.S. Treasury rates plus a 2.808% spread.
- 5Non-cumulative dividends: missed dividends are not paid out later.
- 6Perpetual stock with no maturity date; redeemable at PNC's option after the first reset date or upon a Regulatory Capital Treatment Event.
- 7Restrictions on common stock and junior/parity preferred stock distributions if Series W dividends are not paid.