Bread Financial Finalizes $120M Preferred Stock Offering at 8.875% Dividend Rate

summarizeSummary

Bread Financial Holdings finalized the terms for its public offering of 8.875% Series B Preferred Stock, raising $120 million in gross proceeds to bolster its financial position.

check_boxKey Events · Financing and Capital Events · BFH

• Preferred Stock Offering Finalized

  Bread Financial Holdings finalized the terms for its public offering of 4.8 million depositary shares, each representing a 1/40th interest in its 8.875% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B.

• $120 Million Capital Raise

  The offering is expected to generate $120 million in gross proceeds for the company, with net proceeds to the issuer before expenses totaling $116.22 million.

• High Fixed Dividend Rate

  The Series B Preferred Stock will pay a fixed dividend rate of 8.875% per annum until the first reset date in December 2031, after which it will reset based on the Five-Year U.S. Treasury Rate plus 4.804 percentage points.

• Potential Upsize Option

  Underwriters have a 30-day option to purchase an additional 720,000 depositary shares, which could increase the total offering size to $138 million.

auto_awesomeAnalysis · BFH · Finance

This Free Writing Prospectus finalizes the terms and pricing of the Series B Preferred Stock offering, which was initially announced earlier today. The company will raise $120 million in gross proceeds, or up to $138 million if the underwriters' over-allotment option is fully exercised. While this capital infusion significantly strengthens Bread Financial's liquidity and financial flexibility, the 8.875% fixed rate reset non-cumulative perpetual dividend introduces a new fixed financial obligation. This will impact earnings available to common shareholders, although the preferred stock structure avoids direct common share dilution. Investors should consider the balance between enhanced capital resources and the increased cost of capital.