Terms

Series

4.875% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock

Liquidation Preference

$1,000.00

Coupon Rate

4.875%

Rate Type

Fixed To Floating

Annual Dividend

$48.75

Payment Frequency

Semi Annual

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

September 16, 2024

First Call Price

$1,000.00

Capital Stack Ranking

Junior To: All Debt Obligations Of Duke Energy Corporation; Pari Passu With: Other Series Of Preferred Stock On Parity; Senior To: Common Stock, Any Junior Preferred Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Shares Offered

1,000,000

Prospectus Summary

Duke Energy Corporation is offering 1,000,000 shares of its 4.875% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock at a $1,000 liquidation preference per share, for aggregate proceeds of $1 billion. The initial fixed dividend rate of 4.875% per annum ($48.75/share annually) applies through September 16, 2024 (the First Call Date), after which the rate resets every five years to the prevailing Five-year U.S. Treasury Rate plus a spread of 338.8 basis points. Dividends are paid semi-annually on March 16 and September 16, commencing March 16, 2020. Critically, this is a cumulative preferred, meaning any unpaid dividends accumulate without interest and must be satisfied in full before any distributions can be made on common stock or junior securities. As a preferred stock of Duke Energy Corporation (the holding company), the Series B Preferred Stock ranks senior to Duke Energy's common stock and any junior preferred securities, but is subordinate to all of the company's debt obligations. Investors should note structural subordination risk: Duke Energy is a holding company whose primary assets are interests in regulated utility subsidiaries; in a stress scenario, creditors of those subsidiaries would have priority over Duke Energy's obligations, including these preferred shares. The shares include a regulatory capital call provision allowing Duke Energy to redeem the entire issue (but not partially) within 120 days of a ruling that the preferred no longer qualifies as Tier 1 regulatory capital, providing the issuer an exit if the regulatory capital treatment changes unfavorably. At par, the current yield is 4.875% ($48.75 annually), declining or increasing after each five-year reset based on treasury rates plus the 338.8 bps spread. Dividends paid by Duke Energy Corporation, a C-corporation, are generally expected to qualify as qualified dividend income (QDI) for individual holders taxed at the preferential 15%/20% federal rate, and likely qualify for the corporate dividends-received deduction (DRD). Payments are made semi-annually on March 16 and September 16. Because the preferred is cumulative, failure to declare a dividend does not eliminate the obligation—arrears accumulate and must be cleared before any junior distributions, providing meaningful protection to income investors relative to non-cumulative structures.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Subsequent Call Schedule

• Date2029-09-16

  Price1000.0
• Date2034-09-16

  Price1000.0

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If dividends on the Series B Preferred Stock are in arrears and unpaid, Duke Energy is generally restricted from paying dividends on or repurchasing common stock or other securities ranking junior to the Series B Preferred Stock until all accumulated and unpaid dividends are paid in full.

Other Preferreds from Duke Energy Corporation

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 65 (Strong)