Summary
State Street Corporation (STT) announced on February 12, 2020, a redemption of all outstanding shares of its non-cumulative perpetual preferred stock, Series C. This redemption involves 5,000 shares at a price of $100,000 per share, totaling $500 million. The redemption is scheduled for March 16, 2020, and includes any declared but unpaid dividends. However, a separately declared final dividend for the period up to March 15, 2020, will be paid to shareholders of record on March 2, 2020, meaning this final dividend will not be included in the redemption price, effectively increasing the total payout to holders of Series C preferred stock. The company has secured approval from the Federal Reserve for this redemption, which is stated to be in addition to its original capital plan submitted for the 2019 CCAR cycle. Investors should note that State Street anticipates approximately $9 million in accelerated costs related to this redemption in the first quarter of 2020. This action follows significant dividend payments on the Series C preferred stock in 2019, totaling $26 million, indicating a strategic move by State Street to manage its capital structure.
Key Highlights
- 1State Street to redeem all outstanding Series C preferred stock (5,000 shares) for $100,000 per share.
- 2Total redemption value amounts to $500 million.
- 3Redemption date is set for March 16, 2020.
- 4A final dividend declared separately will be paid to record holders as of March 2, 2020, and is not included in the redemption price.
- 5The redemption has received approval from the Federal Reserve.
- 6Anticipated accelerated costs of $9 million in Q1 2020 related to the redemption.
- 7In 2019, Series C preferred stock paid $26 million in dividends.