Terms

Series

6.000% Series VV Cumulative Redeemable Perpetual Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

6%

Rate Type

Fixed

Annual Dividend

$1.50

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

September 30, 2026

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness (Including Credit Facilities And Senior Unsecured Notes), Any Future Senior Stock, Indebtedness And Liabilities Of Subsidiaries (Structural Subordination); Pari Passu With: 6.625% Series Uu Cumulative Redeemable Perpetual Preferred Stock, Any Future Parity Stock Expressly Made Parity; Senior To: Common Stock, Junior Stock (Any Capital Stock Established After Issuance Not Expressly Senior Or Parity)

Regulatory (Basel III) Call

No

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

24,000,000

Prospectus Summary

Telephone and Data Systems, Inc. (TDS) is offering 24,000,000 depositary shares (NYSE: TDSPrV), each representing a 1/1,000th interest in a share of its 6.000% Series VV Cumulative Redeemable Perpetual Preferred Stock, with a liquidation preference of $25.00 per depositary share. The fixed 6.000% coupon yields $1.50 per depositary share annually ($0.375 quarterly), payable on March 31, June 30, September 30, and December 31, commencing September 30, 2021. The stock is perpetual with no maturity date and is callable at par ($25.00) on or after September 30, 2026. Dividends are cumulative — meaning any missed payments accumulate and must be paid in full before TDS can make distributions to common shareholders, providing holders meaningful protection against temporary earnings shortfalls. The Series VV Preferred Stock sits above TDS common stock and any future junior securities, and ranks pari passu with the existing Series UU 6.625% Preferred Stock. It is junior to all existing and future TDS debt (~$636 million at the holding company level as of June 30, 2021) and is structurally subordinated to approximately $2.8 billion of debt at TDS operating subsidiaries (primarily UScellular), whose creditors have prior claims on subsidiary assets. As a holding company issuer, TDS relies entirely on dividends and intercompany payments from subsidiaries to service the preferred. There is no bank-regulatory Tier 1 capital call, but there is a Ratings Event call: if a rating agency retroactively reduces the equity credit assigned to the Series VV Preferred Stock relative to its original issuance level, TDS may redeem at a modest premium of $25.50 per depositary share prior to September 30, 2026. At the $25.00 public offering price, the effective yield is exactly 6.00% annually. Dividends paid by TDS, a Delaware C-corporation, are generally eligible for the 15%/20% qualified dividend income (QDI) rate for individual holders and the dividends-received deduction (DRD) for corporate holders, subject to standard holding-period and other requirements. Payments are made quarterly on the last day of each calendar quarter, with record dates not explicitly specified. The dividend stopper provision means that if TDS misses any cumulative dividend on the Series VV Preferred Stock (or any parity series), it is prohibited from paying dividends on or repurchasing its common stock until the arrearage is cured; similarly, if any future senior preferred stock dividends go unpaid, Series VV Preferred dividends are also blocked.

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 VV Preferred Stock and any parity preferred, it cannot pay dividends on or repurchase its common stock or any other junior securities (with limited exceptions); conversely, if TDS has not paid dividends on any future senior preferred, it cannot pay dividends on the Series VV Preferred Stock.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 47 (Average)