By Cristal Cody
Chicago, Feb. 23 – Prudential Financial Inc. priced $1 billion of fixed-to-fixed reset rate junior subordinated notes due 2052 (Baa1/BBB+/BBB) on Wednesday, according to an FWP filed with the Securities and Exchange Commission.
For the first 10 years, the interest rate will be 5.125%. The first reset date for the interest rate will be Feb. 28, 2032 and then on every fifth anniversary thereafter. On the reset dates the interest rate will reset to the five-year Treasury rate plus 316.2 basis points.
Price talk was in the 5.375% area, according to a market source.
The notes are optionally redeemable with a make-whole premium of Treasuries plus 50 bps before Nov. 28, 2031. The notes can be called at par three months before any of the reset dates, including Feb. 28, 2032.
At least $25 million principal amount must remain outstanding if the notes are called in part.
BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are joint bookrunners of the registered deal.
The proceeds will be used for general corporate purposes, which may include redemption of the company’s $1 billion principal amount of 2042 notes.
The financial services company is based in Newark, N.J.
| Issuer: | Prudential Financial Inc.
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| Amount: | $1 billion
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| Issue: | Fixed-to-fixed reset rate junior subordinated notes
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| Maturity: | March 1, 2052
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| Bookrunners: | BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC
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| Senior co-managers: | Santander Investment Securities Inc., Scotia Capital (USA) Inc., SG Americas Securities, LLC, Standard Chartered Bank and TD Securities (USA) LLC
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| Junior co-managers: | CastleOak Securities, LP, Ramirez & Co., Inc., R. Seelaus & Co., LLC and Siebert Williams Shank & Co., LLC
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| Trustee: | Bank of New York Mellon
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| Counsel to issuer: | In-house
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| Counsel to bookrunners: | Cleary Gottlieb Steen & Hamilton LLP
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| Coupon: | 5.125% starting rate; resets to Treasuries plus 316.2 bps on Feb. 28, 2032 and then on every fifth anniversary thereafter
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| Price: | Par
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| Yield: | 5.125%
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| Spread: | Treasuries plus 316.2 bps
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| Call features: | Make-whole call at Treasuries plus 50 bps before Nov. 28, 2031; then par call three months before each reset date
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| Trade date: | Feb. 23
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| Settlement date: | Feb. 28
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| Ratings: | Moody’s: Baa1
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| S&P: BBB+
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| Fitch: BBB
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| Distribution: | SEC registered
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| Price talk: | 5.375% area
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| Cusip: | 744320BJ0
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