First Citizens BancShares, Inc., parent company of First-Citizens Bank & Trust Company, announced that First Citizens Bank has given notice of its intention to redeem approximately $2.9 billion of its senior unsecured debt.
On January 24, 2022, First Citizens Bank notified Wilmington Trust, National Association, as trustee (the “Trustee”), and Deutsche Bank Trust Company Americas, as paying agent, security registrar and authenticating agent (the “Paying Agent”), of its intention to redeem on February 24, 2022 (the “Redemption Date”) (a) all of its outstanding $1,147,000,000 aggregate principal amount of 5.000% Senior Unsecured Notes due 2022 (the “2022 Notes”), (b) all of its outstanding $750,000,000 aggregate principal amount 5.000% Senior Unsecured Notes due 2023 (the “2023 Notes”), (c) all of its outstanding $500,000,000 aggregate principal amount of 4.750% Senior Unsecured Notes due 2024 (the “2024 Notes”), and (d) all of its outstanding $500,000,000 aggregate principal amount of 5.250% Senior Unsecured Notes due 2025 (the “2025 Notes,” and together with the 2022 Notes, the 2023 Notes, and the 2024 Notes, the “Notes”). The Notes were assumed by First Citizens Bank in connection with its merger with CIT Group Inc. (“CIT”).
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Craig L. Nix, First Citizens Chief Financial Officer, noted, “This redemption aligns with our strategy to optimize the balance sheet for the newly combined company as we work to reduce higher debt costs by utilizing excess cash from our deposit growth.”
The Notes will be redeemed at a redemption price equal to the greater of (1) 100% of the principal amount thereof and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes that would be due after the Redemption Date but for such redemption (exclusive of interest accrued to the Redemption Date) (in the case of the 2024 Notes and 2025 Notes, assuming for this purpose that the Notes matured on the applicable par call date) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Yield plus 50 basis points (or 30 basis points in the case of the 2024 Notes), plus, in either case, accrued and unpaid interest, if any, to the Redemption Date.
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First Citizens Bank expects to redeem the Notes from cash on hand. This announcement does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
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