Terms

Series

Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2

Liquidation Preference

$25.00

Coupon Rate

7.1%

Rate Type

Fixed To Floating

Annual Dividend

$1.77

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

March 31, 2024

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Debt Obligations, Capital Stock Or Equity Capital Designated As Senior With Required Class B Preferred Stock Holder Approval; Pari Passu With: 8% Cumulative Redeemable Preferred Stock, Class B Series 1 Preferred Stock, Other Parity Capital Stock; Senior To: Patronage Refunds, Patrons' Equities, Common Stock, Junior-Designated Capital Stock

Regulatory (Basel III) Call

No

Tax Classification

Other

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

14,608,696

Prospectus Summary

CHS Inc., a Minnesota agricultural cooperative, is offering 14,608,696 shares of its Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2, with a $25.00 liquidation preference per share, listed on NASDAQ under 'CHSCN.' The stock pays a fixed rate of 7.10% per annum ($1.775/share annually, $0.44375 quarterly) through March 30, 2024, then resets quarterly to three-month LIBOR plus 4.298%, capped at 8.00% per annum. These dividends are cumulative — meaning any missed payments accrue and must be paid in full before any distributions are made on junior securities, providing meaningful protection relative to non-cumulative structures. The Class B Series 2 Preferred Stock ranks senior to CHS's common equity, patronage refunds, and patrons' equities, but junior to all of CHS's debt obligations, making it structurally subordinate to creditors in the event of financial distress. It ranks pari passu with the existing 8% Cumulative Redeemable Preferred Stock and the Class B Series 1 Preferred Stock. There is no regulatory capital call provision, as CHS is a cooperative and not subject to banking capital adequacy requirements. The stock is not rated by any major rating agency, which investors should weigh carefully when assessing credit risk. At the $25.00 public offering price, the initial yield is 7.10% annually. Dividends are payable quarterly on March 31, June 30, September 30, and December 31, commencing June 30, 2014. Because CHS is a cooperative rather than a corporation, dividends are unlikely to qualify for the 15%/20% preferential qualified dividend income (QDI) rate or the corporate dividends-received deduction (DRD); investors should consult their tax advisors. The dividend stopper mechanism means that if CHS suspends distributions, no payments can flow to common equity or other junior interests until all accumulated preferred dividends are satisfied in full.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If dividends on the Class B Series 2 Preferred Stock are not paid, accumulated and unpaid dividends must be satisfied before any distributions can be made on junior securities such as common equity and patronage refunds.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 57 (Average)