Terms

Series

Fixed Rate Perpetual Non-Cumulative Preferred Stock, Series F

Liquidation Preference

$25.00

Coupon Rate

5.65%

Rate Type

Fixed

Annual Dividend

$1.41

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

December 15, 2023

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Secured And Unsecured Debt Of Keycorp, All Liabilities And Obligations Of Keybank And Other Subsidiaries (Structural Subordination); Pari Passu With: Series D Preferred Stock, Series E Preferred Stock, Any Other Parity Preferred Stock; Senior To: Keycorp Common Stock, Any Junior Preferred Stock

Credit Rating (S&P)

below investment grade

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.025

Shares Offered

17,000,000

Prospectus Summary

KeyCorp (NYSE: KEY), a large bank holding company with ~$137.8 billion in total assets, is offering 17,000,000 depositary shares, each representing 1/40th of a share of its Fixed Rate Perpetual Non-Cumulative Preferred Stock, Series F (NYSE: KEY PrJ). Each depositary share has a $25 liquidation preference and pays a fixed 5.650% annual dividend ($0.353125 per depositary share quarterly), with no maturity date. The stock is non-cumulative — if KeyCorp's board does not declare a dividend for any period, that dividend is permanently forfeited and investors have no claim to recover it. The Series F Preferred Stock sits junior to all of KeyCorp's secured and unsecured debt, and pari passu with existing Series D and Series E preferred stock. Because KeyCorp is a holding company, the preferred is also structurally subordinated to all deposit liabilities and borrowings of KeyBank (~$117.2 billion), meaning KeyBank's creditors have priority on KeyBank's assets before any proceeds reach KeyCorp preferred holders. The regulatory capital call provision allows KeyCorp to redeem all (but not less than all) shares at $25 per depositary share at any time — subject to Federal Reserve approval — if a 'regulatory capital treatment event' occurs (i.e., the shares lose or are likely to lose their Additional Tier 1 capital qualification), creating early redemption risk before the standard December 15, 2023 call date. At the $25 offering price, the Series F Preferred Stock yields 5.650% ($1.4125 annually per depositary share), paid quarterly on March 15, June 15, September 15, and December 15, commencing December 15, 2018. Dividends generally qualify as 'qualified dividend income' (QDI) for individual U.S. holders, taxed at a maximum 20% federal rate, and qualify for the 50% dividends-received deduction (DRD) for U.S. corporate holders, subject to holding period and earnings-and-profits requirements. KeyCorp cannot pay dividends on common stock or repurchase junior stock unless Series F dividends for the most recently completed period have been declared and paid in full — a stopper mechanism that provides indirect protection to preferred holders.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If KeyCorp has not paid dividends on the Series F Preferred Stock for the most recently completed dividend period, it cannot declare or pay dividends on common stock or any other junior stock, and cannot repurchase or redeem junior stock.

Other Preferreds from KeyCorp

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 50 (Average)