PNC Bank 2009 Annual Report Download - page 154

N OTE 19 E QUITY
Preferred Stock
Information related to preferred stock is as follows:
Preferred Shares
December 31
Shares in thousands
Liquidation
value per
share 2009 2008
Authorized
$1 par value 16,956 16,960
Issued and outstanding
Series A $ 40 66
Series B 40 11
Series C 20 118 119
Series D 20 168 171
Series K 10,000 50 50
Series L 100,000 22
Series N 100,000 76 76
Total issued and outstanding 421 425
On December 31, 2008, we issued $7.6 billion of Fixed Rate
Cumulative Perpetual Preferred Stock, Series N, to the US
Treasury under the US Treasury’s Troubled Asset Relief
Program (TARP) Capital Purchase Program, together with a
warrant to purchase shares of common stock of PNC
described below. We paid dividends totaling $332 million on
this preferred stock in 2009. See Note 28 Subsequent Events
regarding our February 2010 redemption of this preferred
stock.
As part of the National City transaction, we issued 9.875%
Fixed-to-Floating Rate Non-Cumulative Preferred Stock,
Series L in exchange for National City’s Fixed-to-Floating
Rate Non-Cumulative Preferred Stock, Series F. Dividends are
payable if and when declared each 1st of February, May,
August and November. Dividends will be paid at a rate of
9.875% prior to February 1, 2013 and at a rate of three-month
LIBOR plus 633 basis points beginning February 1, 2013. The
Series L is redeemable at PNC’s option, subject to a
replacement capital covenant for the first ten years after
issuance and subject to Federal Reserve approval, if then
applicable, on or after February 1, 2013 at a redemption price
per share equal to the liquidation preference plus any declared
but unpaid dividends.
Also as part of the National City transaction, we established
the PNC Non-Cumulative Perpetual Preferred Stock, Series
M, which mirrors in all material respects the former National
City Non-Cumulative Perpetual Preferred Stock, Series E.
PNC has designated 5,751 preferred shares, liquidation value
$100,000 per share, for this series. No shares have yet been
issued; however, National City issued stock purchase
contracts for 5,001 shares of its Series E Preferred Stock (now
replaced by the PNC Series M as part of the National City
transaction) to the National City Preferred Capital Trust I in
connection with the issuance by that Trust of $500 million of
12.000% Fixed-to-Floating Rate Normal Automatic
Preferred Enhanced Capital Securities (the Normal APEX
Securities) in January 2008 by the Trust. It is expected that the
Trust will purchase 5,001 of the Series M preferred shares
pursuant to these stock purchase contracts on December 10,
2012 or on an earlier date and possibly as late as
December 10, 2013. The Trust has pledged the $500,100,000
principal amount of National City 8.729% Junior
Subordinated Notes due 2043 held by the Trust and their
proceeds to secure this purchase obligation.
If Series M shares are issued prior to December 10, 2012, any
dividends on such shares will be calculated at a rate per
annum equal to 12.000% until December 10, 2012, and
thereafter, at a rate per annum that will be reset quarterly and
will equal three-month LIBOR for the related dividend period
plus 8.610%. Dividends will be payable if and when declared
by the Board at the dividend rate so indicated applied to the
liquidation preference per share of the Series M Preferred
Stock. The Series M is redeemable at PNC’s option, subject to
a replacement capital covenant for the first ten years after
issuance and subject to Federal Reserve approval, if then
applicable, on or after December 10, 2012 at a redemption
price per share equal to the liquidation preference plus any
declared but unpaid dividends.
As a result of the National City transaction, we assumed
National City’s obligations under replacement capital
covenants with respect to (i) the Normal APEX Securities and
our Series M shares and (ii) National City’s 6,000,000 of
Depositary Shares (each representing 1/4000th of an interest
in a share of our 9.875% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series L), whereby we
agreed not to cause the redemption or repurchase of the
Normal APEX or Depositary Shares, as applicable, or the
underlying Preferred Stock and/or junior subordinated notes,
as applicable, unless such repurchases or redemptions are
made from the proceeds of the issuance of certain qualified
securities and pursuant to the other terms and conditions set
forth in the replacement capital covenant with respect to the
Normal APEX (the APEX RCC) or the replacement capital
covenant with respect to the Depositary Shares (the
Depositary Shares RCC), as applicable.
As of December 31, 2009, each of the APEX RCC and the
Depositary Shares RCC are for the benefit of holders of our
$700 million of 6.875% Subordinated Notes Due 2019.
In May 2008, we issued $500 million of Depositary Shares,
each representing a fractional interest in a share of PNC
Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock,
Series K. Dividends are payable if and when declared each
May 21 and November 21 until May 21, 2013. After that date,
dividends will be payable each 21st of August, November,
February and May. Dividends will be paid at a rate of 8.25%
prior to May 21, 2013 and at a rate of three-month LIBOR
plus 422 basis points beginning May 21, 2013.
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