8-KShareholder MattersCorporate ChangesOther Events+1

STATE STREET CORP 8-K Report, Rights Modification (Apr 8, 2016)

Filed April 8, 2016For Securities:STTSTT-PG

Summary

State Street Corporation (STT) filed an 8-K on April 8, 2016, primarily to disclose the issuance of new preferred stock and related underwriting. The company entered into an underwriting agreement on April 4, 2016, for the sale of 20,000,000 depositary shares. These depositary shares represent interests in a newly created Series G Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock. The offering was priced at $25 per depositary share, generating net proceeds of approximately $493.9 million. A significant portion of these proceeds, up to $485 million, is earmarked for the cash consideration of the planned acquisition of GE Asset Management. The remainder will be used for general corporate purposes, including potential share repurchases and dividends.

Key Highlights

  • 1State Street Corporation filed an 8-K on April 8, 2016, announcing the issuance of new preferred stock.
  • 2The company entered into an underwriting agreement on April 4, 2016, for an underwritten public offering of 20,000,000 depositary shares.
  • 3The depositary shares represent ownership in Series G Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock.
  • 4The offering priced at $25 per depositary share, yielding approximately $493.9 million in net proceeds.
  • 5A substantial portion of the proceeds (up to $485 million) is intended to fund the acquisition of GE Asset Management.
  • 6The remaining proceeds will be used for general corporate purposes, including potential share repurchases and dividends.
  • 7The company also filed Articles of Amendment to its Articles of Organization to establish the Series G Preferred Stock.

Frequently Asked Questions

The main purpose of this 8-K filing is to report on State Street Corporation's entry into an underwriting agreement for the public offering of new depositary shares, which represent interests in a newly created Series G Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock. It also details the intended use of the proceeds from this offering.

State Street raised approximately $493.9 million in net proceeds from the offering. Up to $485 million of these proceeds are intended to fund the cash consideration for the planned acquisition of GE Asset Management. The remaining proceeds will be used for general corporate purposes.

The Series G Preferred Stock is a newly created class of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock of State Street Corporation. Each depositary share represents a 1/4,000th ownership interest in a share of this preferred stock, which has a liquidation preference of $100,000 per share.

The filing mentions that the preferred stock is 'non-cumulative,' meaning that if dividends are not declared in a particular period, they are lost and do not accumulate. The 'fixed-to-floating' nature indicates that the dividend rate will transition from a fixed rate to a floating rate after an initial period, introducing interest rate risk. Investors should consult the full prospectus for detailed risk factors.