Terms

Series

4.60% Non-Cumulative Preferred Stock, Series B

Liquidation Preference

$25.00

Coupon Rate

4.6%

Rate Type

Fixed

Annual Dividend

$1.15

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

December 15, 2025

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness And Other Non-Equity Claims On Selective, All Indebtedness, Other Liabilities And Preferred Equity Of Subsidiaries (Structural Subordination); Pari Passu With: Any Other Series Of Parity Preferred Stock (If Issued); Senior To: Common Stock, Any Other Junior Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

8,000,000

Prospectus Summary

Selective Insurance Group, Inc. is offering 8,000,000 depositary shares, each representing a 1/1,000th interest in a share of its 4.60% Non-Cumulative Preferred Stock, Series B, with a liquidation preference of $25,000 per underlying share (equivalent to $25.00 per depositary share), priced at par. The stock is callable at $25.00 per depositary share on or after December 15, 2025, with earlier redemption permitted upon a rating agency event (at $25.50) or regulatory capital event (at $25.00). Critically, dividends are non-cumulative: if the board does not declare a dividend for any quarter, that payment is permanently lost and holders have no claim to it. The Series B preferred stock sits above Selective's common stock and any other junior equity in the capital stack but is junior to all of Selective's existing and future debt obligations, including approximately $717.6 million in senior notes and FHLB borrowings as of September 30, 2020. As a holding company issue, the preferred is also structurally subordinated to roughly $5.8 billion in liabilities of Selective's insurance subsidiaries, meaning subsidiary creditors and policyholders are paid before preferred holders can access subsidiary assets. The regulatory capital call provision allows Selective to redeem the preferred in whole within 90 days if it becomes subject to capital adequacy supervision and the Series B no longer qualifies as regulatory capital. At the $25.00 offering price, the Series B yields 4.60% annually ($1.15 per depositary share), paid quarterly on March 15, June 15, September 15, and December 15 (commencing March 15, 2021), with a record date set 15 calendar days before each payment date. As dividends from a domestic C-corporation, they are expected to qualify for the preferential 15%/20% qualified dividend income (QDI) rate for individual holders and the dividends-received deduction (DRD) for corporate holders, though investors should consult the full tax section. The dividend stopper prevents Selective from paying dividends on or repurchasing common stock or junior equity unless the most recently completed quarterly dividend on the Series B has been paid in full — but because the preferred is non-cumulative, a skipped dividend itself carries no obligation to catch up.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Selective has not paid full dividends on the Series B preferred stock for the most recently completed dividend period, it cannot declare or pay dividends on its common stock or other junior stock, nor repurchase or redeem junior stock for cash.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 75 (Strong)