Item 3.03 Material Modification to Rights of Security Holders.
On September 10, 2021, The PNC Financial Services Group, Inc. (the
"Corporation") filed a Statement with Respect to Shares (the "Statement") with
the Secretary of State of the Commonwealth of Pennsylvania establishing the
rights, preferences, privileges, qualifications, restrictions and limitations of
a new series of its preferred stock designated as the 3.400% Fixed-Rate Reset
Non-Cumulative Perpetual Preferred Stock, Series T, $1.00 par value per share
(the "Series T Preferred Stock"). The Statement was filed in connection with an
Underwriting Agreement, dated as of September 8, 2021 (the "Underwriting
Agreement"), among the Corporation, Citigroup Global Markets Inc., BofA
Securities, Inc., J.P. Morgan Securities LLC and PNC Capital Markets LLC
(collectively, the "Underwriters"), pursuant to which the Corporation agreed to
sell to the Underwriters 1,500,000 depositary shares (the "Depositary Shares")
each representing a 1/100th ownership interest in a share of the Series T
Preferred Stock. Each holder of a Depositary Share will be entitled to the
proportional rights of a share of Series T Preferred Stock represented by the
Depositary Share.
The Series T Preferred Stock ranks senior to the Corporation's common stock,
equally with the Corporation's outstanding Series B, O, P, R and S Preferred
Stock, and at least equally with each other series of preferred stock the
Corporation may issue (except for any senior securities that may be issued with
the requisite consent of the holders of the Series T Preferred Stock and all
parity stock), with respect to payments of dividends and distributions of assets
upon liquidation, dissolution or winding up.
Under the terms of the Series T Preferred Stock, the ability of the Corporation
to pay dividends or distributions on, redeem, purchase or acquire, or make a
liquidation payment with respect to its common stock or any preferred stock
ranking on parity with or junior to the Series T Preferred Stock is subject to
restrictions in the event that the Corporation does not declare dividends on the
Series T Preferred Stock for the most recently completed dividend period, or, in
the case of a liquidation payment, does not pay to holders of the Series T
Preferred Stock the liquidation value of $100,000 per share, plus any declared
and unpaid dividends, without accumulation of any undeclared dividends.
The terms of the Series T Preferred Stock are more fully described in the
Statement, which is included as Exhibit 3.1 to this Current Report on Form 8-K
and is incorporated by reference herein.
Item 5.03 Amendments to Articles of Incorporation or By-Laws; Change in Fiscal
Year.
On September 10, 2021, the Corporation filed the Statement with the Secretary of
State of the Commonwealth of Pennsylvania, which became effective upon filing,
amending its Amended and Restated Articles of Incorporation to establish the
newly authorized Series T Preferred Stock of the Corporation consisting of
15,000 authorized shares.
Holders of Series T Preferred Stock will be entitled to receive, when, as and if
declared by the Board of Directors of the Corporation (the "Board") or a duly
authorized committee of the Board, non-cumulative cash dividends based on the
liquidation preference (1) from the original issue date of the Series T
Preferred Stock to, but excluding, September 15, 2026 (the "first reset date"),
at a fixed rate per annum of 3.400%, and (2) from and including the first reset
date, during each reset period (as defined below), at a rate per annum equal to
the five-year U.S. Treasury rate (as defined in the Statement) as of the most
recent reset dividend determination date (as defined below) plus a spread of
2.595%. If declared by the Board or a duly authorized committee of the Board,
dividends will be payable on the Series T Preferred Stock quarterly in arrears
on March 15, June 15, September 15 and December 15 of each year, beginning on
December 15, 2021. A "reset date" means the first reset date and each date
falling on the fifth anniversary of the preceding reset date. Reset dates,
including the first reset date, will not be adjusted for business days. A "reset
period" means the period from and including the first reset date to, but
excluding, the next following reset date and thereafter each period from and
including each reset date to, but excluding, the next following reset date. A
"reset dividend determination date" means, in respect of any reset period, the
day falling three business days prior to the first day of such reset period.
The Series T Preferred Stock has a liquidation preference of $100,000 per share,
plus any declared and unpaid dividends, without accumulation of any undeclared
dividends. Liquidating distributions will be made on the Series T Preferred
Stock only to the extent of the Corporation's assets that are available after
satisfaction of all liabilities to depositors and creditors and subject to the
rights of holders of any security ranking senior to the Series T Preferred
Stock, and pro rata as to the Series T Preferred Stock and any other shares of
the Corporation's stock ranking equally as to such distributions.
The Series T Preferred Stock does not have any maturity date. The Series T
Preferred Stock is redeemable at the Corporation's option (1) in whole or in
part, from time to time, on any dividend payment date on or after the first
reset date, at a redemption price equal to $100,000 per share (equivalent to
$1,000 per depositary share), plus any declared and unpaid dividends, without
accumulation of any undeclared dividends, or (2) in whole but not in part, at
any time within 90 days following a regulatory capital treatment event (as
defined in the Statement), at a redemption price equal to $100,000 per share
(equivalent to $1,000 per depositary share), plus any declared and unpaid
dividends and an amount equal to the partial dividend that would have accrued
from the prior scheduled dividend payment date to the redemption date. If the
Corporation redeems the Series T Preferred Stock, the depositary will redeem a
proportionate number of Depositary Shares. Accordingly, the Series T Preferred
Stock will remain outstanding indefinitely, unless and until the Corporation
decides to redeem it. The Series T Preferred Stock has no preemptive or
conversion rights.
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The Series T Preferred Stock has no voting rights except with respect to (1)
authorizing, increasing the authorized amount of or issuing senior stock; (2)
authorizing adverse changes in the terms of the Series T Preferred Stock; (3)
certain merger events; (4) in the case of certain non-payments of dividend only,
electing directors; and (5) as otherwise required under Pennsylvania law.
The terms of the Series T Preferred Stock are more fully described in the
Statement, which is included as Exhibit 3.1 to this Current Report on Form 8-K
and is incorporated by reference herein.
Item 8.01 Other Events.
On September 13, 2021, the Corporation closed the public offering of 1,500,000
Depositary Shares pursuant to the Underwriting Agreement. The Depositary Shares
and the Series T Preferred Stock have been registered under the Securities Act
of 1933, as amended, by a registration statement on Form S-3ASR (File No. 333-
228804) (the "Registration Statement"). The following documents are being filed
with this report and incorporated by reference into the Registration Statement:
(a) the Underwriting Agreement; (b) the Statement; (c) the Deposit Agreement,
dated as of September 13, 2021, among the Corporation, Computershare Trust
Company N.A. and Computershare Inc., as depositary, and the holders from time to
time of the Depositary Receipts described therein; (d) the Form of Depositary
Receipt; and (e) the validity opinion with respect to the Depositary Shares and
the Series T Preferred Stock.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Number Description Method of Filing
1.1 Underwriting Agreement dated as of September 8, Filed herewith
2021
3.1 Statement with Respect to Shares of the 3.400% Filed herewith
Fixed-Rate Reset Non-Cumulative Perpetual
Preferred Stock, Series T
4.1 Deposit Agreement, dated as of September 13, Filed herewith
2021, between the Corporation, Computershare
Trust Company, N.A. and Computershare Inc., as
depositary, and the holders from time to time of
the Depositary Receipts described therein
4.2 Form of Depositary Receipt (included as part of Filed herewith
Exhibit 4.1)
5.1 Opinion of Alicia G. Powell Filed herewith
23.1 Consent of Alicia G. Powell (included in Filed herewith
Exhibit 5.1)
104 The cover page of this Current Report on Form
8-K, formatted as an inline XBRL.
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