Summary
This 8-K filing from BB&T Corporation (now Truist Financial Corp) on April 2, 2012, announces the company's decision to redeem certain trust preferred securities. These redemptions are being exercised at BB&T's option, as the securities are callable. The primary driver for these redemptions is to adjust BB&T's capital structure to comply with evolving regulatory capital guidelines, specifically to ensure these securities no longer count towards Tier 1 capital.
Key Highlights
- 1BB&T Corporation is redeeming three series of trust preferred securities from separate trusts: Mason-Dixon Capital Trust, Premier Capital Trust I, and MainStreet Capital Trust I.
- 2The redemptions are being conducted at BB&T's discretion, as the securities are callable.
- 3The total principal amount to be redeemed across the three series is $94,750,000 ($20M + $28.75M + $46M).
- 4These redemptions are intended to ensure the trust preferred securities no longer qualify as Tier 1 capital under current bank regulatory guidelines.
- 5The redemptions are consistent with BB&T's capital plan submitted to the Federal Reserve Board.
- 6Funding for these redemptions will come from BB&T's general corporate reserves.
- 7The redemption dates for all three series are May 2, 2012, with premium payments ranging from 100% to 103.021% of the principal amount.
Frequently Asked Questions
BB&T is redeeming these securities as part of its capital management strategy to align with current bank regulatory capital guidelines. Specifically, these securities will no longer qualify as Tier 1 capital upon redemption, and the company is proactively adjusting its capital structure.
By redeeming these trust preferred securities, BB&T will remove them from its Tier 1 capital. This action is a proactive step to ensure compliance with regulatory capital requirements and is part of the company's approved capital plan with the Federal Reserve Board.
Holders of Mason-Dixon Capital Trust securities will receive 103.021% of the principal amount. Holders of MainStreet Capital Trust I securities will receive 102.670% of the principal amount. Holders of Premier Capital Trust I securities will receive 100% of the principal amount, plus any accrued and unpaid distributions.
The redemptions will be funded by BB&T's general corporate reserves, indicating the company has sufficient liquidity to manage this capital transaction.