8-KOther EventsExhibits & Filings

SCHWAB CHARLES CORP 8-K Report, Corporate Update (Jun 18, 2012)

Filed June 18, 2012For Securities:SCHWSCHW-PDSCHW-PJ

Summary

The Charles Schwab Corporation (SCHW) filed an 8-K report on June 18, 2012, to disclose the issuance and sale of an additional 2,400,000 depositary shares, each representing a 1/40th ownership interest in its 6.00% non-cumulative perpetual preferred stock, Series B. This issuance was a result of the underwriters exercising their option to purchase additional shares to cover over-allotments from an earlier offering. The net proceeds from this specific issuance of additional shares amounted to approximately $58 million after deducting underwriting fees. This event is significant for investors as it represents a capital raise by the company. The preferred stock offering, structured through depositary shares, provides a fixed dividend yield of 6.00%. Investors should note that this is a perpetual preferred stock, meaning it has no maturity date, and the dividends are non-cumulative, meaning any missed dividend payments are not owed to shareholders in the future. The filing also includes legal opinions related to the issuance.

Key Highlights

  • 1Schwab announced the issuance and sale of an additional 2,400,000 depositary shares related to its 6.00% non-cumulative perpetual preferred stock, Series B.
  • 2These additional shares were issued due to the underwriters exercising their over-allotment option.
  • 3The net proceeds from this specific issuance of additional depositary shares were approximately $58 million.
  • 4The offering was conducted under a previously filed prospectus supplement and prospectus via a Form S-3 registration statement.
  • 5The company's Chief Financial Officer, Joseph R. Martinetto, signed the report.
  • 6The filing includes legal opinions from Arnold & Porter LLP regarding the validity of the issued depositary shares.

Frequently Asked Questions

This 8-K filing is primarily to report the completion of the sale of additional depositary shares, which were issued as a result of underwriters exercising their option to purchase more shares than initially offered to cover over-allotments.

The net proceeds to Schwab from the sale of the additional 2,400,000 depositary shares were approximately $58 million, after accounting for underwriting discounts and commissions.

The company is issuing depositary shares, where each depositary share represents a 1/40th ownership interest in a share of 6.00% non-cumulative perpetual preferred stock, Series B.

The preferred stock is described as 'non-cumulative'. This means that if Schwab misses a dividend payment, that payment is not accumulated and owed to shareholders in the future. Dividends are paid at the discretion of the company's board of directors and are subject to the company's financial performance and other factors.