8-KOther EventsExhibits & Filings

STATE STREET CORP 8-K Report, Corporate Update (Feb 7, 2011)

Filed February 7, 2011For Securities:STTSTT-PG

Summary

State Street Corporation (STT) filed an 8-K report on February 7, 2011, detailing a significant transaction involving the remarketing and sale of $500.1 million in Junior Subordinated Debentures. These debentures, originally issued at a higher interest rate in 2008, were effectively refinanced at a lower rate of 4.956% due on March 15, 2018. This move indicates a proactive approach by State Street to manage its debt costs and optimize its capital structure in the prevailing market conditions. The net proceeds from this sale are earmarked for specific purposes, primarily to purchase Treasury securities that will mature shortly before the payment date for a related trust's preferred securities. This transaction is part of a plan to ultimately retire the original debentures and fulfill State Street's obligations related to the purchase of its preferred stock through a trust. Investors should view this as a strategic debt management operation aimed at reducing interest expenses and simplifying the company's financial obligations.

Key Highlights

  • 1State Street Corporation completed a public offering of $500.1 million in 4.956% Junior Subordinated Debentures due March 15, 2018.
  • 2These debentures were remarketed from their original 6.001% rate for debentures due 2042.
  • 3The underwriting agreement was with Goldman, Sachs & Co.
  • 4Proceeds will be used to purchase Treasury securities maturing March 10, 2011.
  • 5The proceeds from the Treasury securities will fund a March 15, 2011 distribution to holders of State Street Capital Trust III's preferred securities (Normal APEX).
  • 6The transaction also facilitates the purchase of 5,001 shares of State Street's Non-Cumulative Perpetual Preferred Stock, Series A, by the Trust.
  • 7The filing includes the underwriting agreement and an opinion from counsel regarding the legality of the debentures.

Frequently Asked Questions

This Form 8-K is filed to report on the "Other Events" related to State Street Corporation's entry into an underwriting agreement for the sale of $500.1 million of Remarketed Junior Subordinated Debentures.

The remarketing allows State Street to refinance its debt at a lower interest rate (4.956% compared to the original 6.001%), which is expected to reduce its interest expense. The net proceeds are being strategically managed to fulfill obligations related to preferred securities and preferred stock purchases through a trust.

The proceeds from the sale of the remarketed debentures will be used to purchase Treasury securities. These Treasury securities will then be used by State Street Capital Trust III on March 15, 2011, to make a final distribution to holders of its Normal APEX preferred securities and to satisfy obligations related to the purchase of State Street's preferred stock.

Goldman, Sachs & Co. acted as the underwriter for the offering. Wilmer Cutler Pickering Hale and Dorr LLP provided a legal opinion regarding the issuance and sale of the Remarketed Junior Subordinated Debentures.