Published on 5/14/2015 in the Prospect News Investment Grade Daily and Prospect News Preferred Stock Daily.
New Issue: Prudential prices $1 billion 5.375% $1,000-par fixed-to-floating junior notes due 2045
By Stephanie N. Rotondo
Phoenix, May 14 – Prudential Financial Inc. sold $1 billion of 5.375% $1,000-par fixed-to-floating rate junior subordinated notes due May 15, 2045 (expected ratings: Baa2/BBB+/BBB-), according to an FWP filed with the Securities and Exchange Commission on Thursday.
Goldman Sachs & Co., BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, HSBC and Mizuho Securities ran the books.
Interest will be fixed and payable semiannually through May 15, 2025. At that point, the notes begin to float at Libor plus 303.1 basis points and will be payable on a quarterly basis.
If no default has occurred, the company can defer interest payments for up to five years.
Prior to May 15, 2025, the notes can be redeemed in whole within 90 days of tax, rating agency or regulatory capital treatment event. In the tax or rating agency event case, the redemption price will equal the greater of 100% of the principal amount being redeemed or the present value of a principal payment on May 15, 2025, including interest payments to that date, discounted by Treasuries minus 50 bps, plus accrued and unpaid interest.
In all other instances, the redemption price is par plus accrued interest.
Otherwise, the notes do not become redeemable until May 15, 2025.
The new securities will not be listed on any exchange.
Proceeds will be used for general corporate purposes, which may include refinancing some medium-term notes coming due in 2016.
Prudential is a Newark, N.J.-based financial services company.
| Issuer: | Prudential Financial Inc.
|
| Securities: | Fixed-to-floating rate junior subordinated notes
|
| Amount: | $1 billion
|
| Maturity: | May 15, 2045
|
| Bookrunners: | Goldman Sachs & Co., BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, HSBC, Mizuho Securities
|
| Senior co-managers: | MUFG, Natixis Securities Americas LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., U.S. Bancorp Investments, Inc.
|
| Junior co-managers: | CastleOak Securities LP, Drexel Hamilton, LLC, Mischler Financial Group, Inc., Samuel A. Ramirez & Co. Inc., Siebert Brandford Shank & Co. LLC, Williams Capital Group LP
|
| Coupon: | 5.375%
|
| Price: | Par of $1,000
|
| Yield: | 5.375%
|
| Talk: | 5.625%
|
| Call options: | Prior to May 15, 2025 in whole within 90 days of a rating agency or tax event at the greater of 100% of the principal amount being redeemed or the present value of a principal payment on May 15, 2025, including interest payments to that date, discounted by Treasuries minus 50 bps, plus accrued and unpaid interest; or in whole within 90 days of a regulatory capital treatment event at par plus accrued interest; or on or after May 15, 2025 at par plus accrued interest
|
| Pricing date: | May 13
|
| Settlement date: | May 18
|
| Expected ratings: | Moody’s: Baa2
|
| Standard & Poor’s: BBB+
|
| Fitch: BBB-
|
| Cusip: | 744320AV4
|
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