Terms

Series

Series A Fixed Rate Non-Cumulative Perpetual Preferred Stock

Liquidation Preference

$25.00

Rate Type

Fixed

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

November 15, 2024

First Call Price

$1,000.00

Capital Stack Ranking

Junior To: All Debt Obligations Of Synchrony Financial And Its Subsidiaries; Pari Passu With: Parity Preferred Stock, If Any; Senior To: Common Stock, Junior Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.025

Prospectus Summary

Synchrony Financial is offering depositary shares, each representing a 1/40th interest in a share of its Series A Fixed Rate Non-Cumulative Perpetual Preferred Stock, with a liquidation preference of $25 per depositary share ($1,000 per underlying preferred share) and a par value of $0.001. The coupon rate was not yet fixed at the time of this preliminary prospectus. Dividends are non-cumulative, meaning that if the Board chooses not to declare a dividend for any quarter, that payment is permanently forfeited — holders have no claim to missed dividends in future periods. The stock is perpetual with no mandatory redemption date. Synchrony may redeem the preferred stock at $1,000 per share (equivalent to $25 per depositary share) on any dividend payment date on or after November 15, 2024, subject to Federal Reserve approval. The Series A Preferred Stock sits above common stock in the capital stack but is structurally subordinated to all debt obligations of Synchrony Financial and its subsidiaries — most importantly, to depositors and creditors of Synchrony Bank, the principal operating subsidiary. Because this is a holding company issuance, in a stress scenario the bank subsidiary's creditors and depositors have a prior claim on the subsidiary's assets before any value flows up to the holding company to satisfy preferred holders. A regulatory capital event call is included: if the preferred stock loses its Tier 1 capital treatment under Federal Reserve rules, Synchrony may redeem the entire issue within 90 days — a meaningful risk if capital regulations change. Dividends are paid quarterly on February 15, May 15, August 15, and November 15, beginning February 15, 2020. As dividends from a U.S. C-corporation, they are expected to qualify as qualified dividend income (QDI) for individual holders taxed at preferential 15%/20% rates, and to qualify for the dividends-received deduction (DRD) for eligible corporate holders. The dividend stopper provision means that if Synchrony misses or underpays a dividend on this preferred, it cannot pay dividends on common stock or repurchase junior securities (with narrow exceptions), providing a layer of protection to preferred holders — though the non-cumulative structure means any skipped payment is not owed in the future.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Synchrony Financial has not paid full dividends on the Series A Preferred Stock for the most recent dividend period, it is prohibited from paying dividends on or repurchasing common stock or any other junior securities (with limited exceptions), and may only repurchase parity preferred stock on a pro rata basis.

Other Preferreds from Synchrony Financial

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 66 (Strong)