Terms

Series

Series UU

Liquidation Preference

$25.00

Coupon Rate

6.625%

Rate Type

Fixed

Annual Dividend

$1.66

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

March 31, 2026

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Tds Indebtedness (Including Credit Facilities And Unsecured Senior Notes), Senior Stock (Any Future Tds Capital Stock Expressly Senior To Series Uu Preferred Stock), All Existing And Future Indebtedness And Liabilities Of Tds Subsidiaries (Structural Subordination); Pari Passu With: Parity Stock (Any Future Class/Series Of Tds Capital Stock Expressly On Parity With Series Uu Preferred Stock); Senior To: Common Stock, Junior Stock (Any Future Class/Series Of Tds Capital Stock Not Expressly Senior To Or On Parity With Series Uu Preferred Stock)

Regulatory (Basel III) Call

No

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

16,000,000

Prospectus Summary

Telephone and Data Systems, Inc. (TDS) is offering 16,000,000 depositary shares, each representing a 1/1,000th interest in a share of its 6.625% Series UU Cumulative Redeemable Perpetual Preferred Stock. Each depositary share has a liquidation preference of $25.00 and pays a fixed annual dividend of $1.65625 ($0.4140625 per quarter), yielding exactly 6.625% at par. The Series UU is cumulative — meaning any unpaid dividends accumulate and must be paid in full before TDS can pay dividends on common stock, providing meaningful investor protection against the board simply skipping payments. The Series UU Preferred Stock sits above common stock but below all TDS debt in the capital stack; at issuance, TDS carried approximately $961 million of holding-company long-term debt senior to these shares. Critically, TDS is a holding company whose cash flows depend entirely on upstream distributions from operating subsidiaries (UScellular, TDS Telecom, OneNeck), which themselves carried approximately $2.577 billion in debt — meaning the preferred is structurally subordinated to all subsidiary liabilities. There is no traditional regulatory (Tier 1) call provision; however, there is a 'Ratings Event' call allowing TDS to redeem in whole at $25.50 per depositary share prior to March 31, 2026 if a rating agency changes its equity-credit methodology in a way that shortens or reduces the equity credit assigned to the Series UU, effectively giving TDS a pre-call escape valve if the preferred loses its equity treatment with rating agencies. At the $25.00 offering price, the effective yield at par is 6.625%, paid quarterly on March 31, June 30, September 30, and December 31 (commencing June 30, 2021). Because TDS is a U.S. C-corporation, dividends are expected to be eligible for the preferential qualified dividend income (QDI) tax rate for individual holders (15%/20%) and the dividends-received deduction (DRD) for eligible corporate holders, subject to applicable holding period and other requirements. Dividend payments can be blocked if TDS has failed to pay dividends on any future senior preferred stock, or if debt covenants or legal restrictions prohibit payment — though no such restrictions exist as of issuance; the cumulative feature ensures any skipped dividends accumulate and must be made whole before junior securities receive distributions.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If TDS has not paid full cumulative dividends on the Series UU Preferred Stock and any parity securities, it is blocked from paying dividends on or repurchasing common stock and other junior securities. Conversely, if TDS has failed to pay dividends on any future senior preferred stock, it cannot pay dividends on or redeem the Series UU Preferred Stock.

Other Preferreds from Telephone and Data Systems Inc

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 48 (Average)