Terms

Series

Class B Cumulative Redeemable Preferred Stock, Series 1

Liquidation Preference

$25.00

Coupon Rate

7.875%

Rate Type

Fixed

Annual Dividend

$1.97

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

September 26, 2023

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Debt Obligations, Any Senior-Approved Capital Stock Or Equity Capital; Pari Passu With: 8% Cumulative Redeemable Preferred Stock, Other Parity Capital Stock Or Equity Capital; Senior To: Patronage Refunds, Patrons' Equities, Junior-Designated Capital Stock Or Equity Capital

Regulatory (Basel III) Call

No

Tax Classification

Other

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

10,000,000

Prospectus Summary

CHS Inc., a Minnesota agricultural cooperative, is offering 10,000,000 shares of its Class B Cumulative Redeemable Preferred Stock, Series 1, at a liquidation preference of $25.00 per share and a fixed coupon rate of 7.875% per annum, equating to $1.96875 per share annually paid quarterly on March 31, June 30, September 30, and December 31, with the first payment on December 31, 2013. The shares are not callable before September 26, 2023, after which CHS may redeem them at $25.00 plus accrued dividends. Critically, dividends are cumulative — meaning any missed payments accrue and must be paid in full before CHS can distribute dividends to junior equity holders, providing meaningful protection to preferred shareholders. The Class B Preferred Stock ranks senior to all patronage refunds, patrons' equities, and any junior-designated capital stock, but is junior to all of CHS's debt obligations and any class of capital stock expressly designated as senior with majority preferred holder approval. It ranks on a parity with CHS's existing 8% Cumulative Redeemable Preferred Stock. As CHS is a cooperative and not a bank holding company, there is no regulatory capital call provision. Holders also have the right to require redemption at $25.00 plus accrued dividends within 90 days following a Board-approved change of control. At the $25.00 offering price, the shares yield 7.875% annually. CHS has not specified whether dividends qualify for the preferential qualified dividend income (QDI) rate or the corporate dividends-received deduction (DRD); given CHS's cooperative structure, investors should consult a tax advisor as treatment may differ from typical corporate preferred dividends. No record date convention is explicitly stated in the prospectus. Dividend payments can only be interrupted if CHS's Board declines to declare them, though accrued cumulative dividends must be cleared before any junior equity distributions are made.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If cumulative dividends on the Class B Preferred Stock are unpaid, CHS is restricted from paying dividends on or redeeming any class of capital stock ranking junior to the Class B Preferred Stock, including patronage refunds and patrons' equities.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 56 (Average)