01—Abstract
Summary
Summary of the 8-K filed February 23, 2024. Cited figures are marked; the original filing is the authoritative source.
Synchrony Financial issued and sold 20,000,000 depositary shares on February 23, 2024, each representing a 1/40th ownership interest in a share of its 8.250%a Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B.
The Certificate of Designations for the Series B Preferred Stock was filed with the Delaware Secretary of State on February 22, 2024, and sets out the voting, dividend, redemption and liquidation rights that holders of the Depositary Shares will receive proportionally. The filing states that the Company's ability to pay dividends on or repurchase its common stock or parity and junior preferred stock is restricted if it does not declare and pay, or set aside, dividends on the Series B Preferred Stock for the immediately preceding dividend period. The offering was made under an underwriting agreement dated February 15, 2024 with Morgan Stanley & Co. LLC, BofA Securities, Inc., J.P.
Morgan Securities LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC as representatives of the underwriters, pursuant to the Company's Form S-3 registration statement (File No. 333-266264) and related prospectus supplement. A Deposit Agreement dated February 23, 2024 among the Company, Computershare Inc. and Computershare Trust Company, N.A., as depositary, governs the Depositary Shares and their receipts.
For investors, the filing is primarily a disclosure of a new preferred stock issuance and its terms, with the governing documents filed as exhibits. The filing itself does not state the offering proceeds, the dividend rate per period beyond the 8.250%b coupon, or any effect on the Company's financial results.
02—Key points
Key Highlights
- Issued 20,000,000 depositary shares on February 23, 2024, each representing a 1/40th interest in a share of 8.250% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B.
- Certificate of Designations for the Series B Preferred Stock was filed with the Delaware Secretary of State on February 22, 2024 and became effective upon filing, amending the Amended and Restated Certificate of Incorporation.
- Holders of the Depositary Shares receive all proportional dividend, voting, redemption and liquidation rights of the Series B Preferred Stock.
- Dividend restrictions apply: if dividends on the Series B Preferred Stock are not declared and paid or set aside for the preceding dividend period, the Company's payments or repurchases of common stock and parity or junior preferred stock are limited.
- Underwriting agreement dated February 15, 2024 with Morgan Stanley, BofA Securities, J.P. Morgan, RBC Capital Markets and Wells Fargo Securities as representatives of the underwriters.
- Offering was made under Form S-3 registration statement (File No. 333-266264) and related prospectus supplement.
- Deposit Agreement with Computershare Inc. and Computershare Trust Company, N.A. as depositary governs the Depositary Shares, with the form of Depositary Receipt included as an exhibit.
03—Questions
Frequently Asked Questions
What securities did Synchrony Financial issue?
The Company issued and sold 20,000,000 depositary shares, each representing a 1/40th ownership interest in a share of its 8.250% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B, par value $0.001 per share.
How are the rights of the preferred stock holders described?
Holders of the Depositary Shares are entitled to all proportional rights and preferences of the Series B Preferred Stock, including dividend, voting, redemption and liquidation rights, as set out in the Certificate of Designations filed as Exhibit 4.1.
Does the Series B Preferred Stock restrict common stock payments?
Yes. If the Company does not declare and either pay or set aside a sufficient sum for dividends on the Series B Preferred Stock for the immediately preceding dividend period, its ability to pay dividends on or repurchase, redeem or otherwise acquire its common stock or parity or junior preferred stock is subject to certain restrictions.
Under what registration and underwriting arrangement was the offering made?
The offering was made under the Company's Form S-3 registration statement (File No. 333-266264) and related prospectus supplement, pursuant to an underwriting agreement dated February 15, 2024 with Morgan Stanley & Co. LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC as representatives of the underwriters.
Who serves as depositary for the Depositary Shares?
Computershare Inc. and Computershare Trust Company, N.A., collectively as depositary, under a Deposit Agreement dated February 23, 2024 with the Company and the holders of the depositary receipts.
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