PNC plans sale; offering marks first public preferred sale by U.S. bank since 2008, trader says

By Stephanie N. Rotondo

Portland, Ore., July 20 - PNC Financial Services Group Inc. announced an upcoming sale of series O depositary shares representing 1/100th of a share of fixed-to-floating-rate non-cumulative perpetual preferred stock.

The preferreds have a liquidation preference of $100,000 each, which is equivalent to $1,000 per depositary share, according to a prospectus filed with the Securities and Exchange Commission on Wednesday.

"This is huge news in our market," said a preferred trader, noting that the deal is the "first public preferred stock [offering] for a U.S. bank in almost three years."

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, PNC Capital Markets LLC and Citigroup Global Markets Inc. are the joint bookrunners.

When approved by the bank's board of directors, dividends will be payable semiannually through Aug. 1, 2021. After that date, the dividends will be payable quarterly at a rate equal to Libor plus a not-yet-set percentage.

The preferreds can be redeemed, at the company's option, after Aug. 1, 2021 at par plus accrued dividends.

The company can also redeem the preferreds within 90 days of a regulatory capital treatment event.

Proceeds will be used for general corporate purposes, including funding the pending acquisition of RBC Bank (USA).

PNC is a Pittsburgh-based bank and holding company.

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