Plus   Neg

KeyCorp Commences Two Exchanges Offers For Preferred Securities - Update

Wednesday, KeyCorp (KEY) commenced an exchange offer for $503.53 million of its 7.750% non-cumulative perpetual convertible preferred stock, series A. The company also commenced a separate exchange offer for $797.65 million trust preferred securities of four affiliated trusts.

The Cleveland, Ohio-based company noted that both the offers are currently expected to expire on June 30, and the exchange ratio would be fixed on June 26.

For each share of series A preferred stock, KeyCorp will issue 7.0922 shares plus $35.00 divided by the daily volume-weighted average price of its common shares during the five consecutive trading days ending on June 26, 2009.

For each trust preferred security of KeyCorp Capital II, KeyCorp Capital III or KeyCorp Capital VII tendered on or prior to on June 16, KeyCorp will issue a number of its common shares equal to the quotient of $850 divided by the Average VWAP.

These exchange offers are principal components of KeyCorp's comprehensive capital plan, which was submitted to the federal banking regulators on June 1, under the requirements of the Supervisory Capital Assessment Program.

Subsequent to the stress test, Federal regulators instructed KeyCorp to raise fresh capital of $1.8 billion, as required under Supervisory Capital Assessment Program.

KeyCorp noted that it has generated $1.3 billion to date, which is about 70% of the government's requirement to date.

The company noted that successful completion of these actions would strengthen its capital framework by improving its Tier 1 common equity ratio, and also reduce the dividend and interest expense associated with the securities exchanged.

KEY is currently trading at $4.71, down 11 cents or 2.28%.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

comments powered by Disqus
Follow RTT