Synchrony Financial Raises $500 Million Through Preferred Stock Offering
The consumer finance company issued depositary shares tied to 7.25% Fixed Rate Reset perpetual preferred stock in a public offering underwritten by major Wall Street banks.
Capital Raise Details
Synchrony Financial disclosed on June 5, 2026, that it "issued and sold 500,000 depositary shares," each representing a 1/100th ownership interest in a share of "7.250% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C" (8-K filing, 2026-06-05). With a liquidation preference of $100,000 per share of preferred stock, equivalent to $1,000 per depositary share, the offering raised approximately $500 million.
The company filed a Certificate of Designations with the Delaware Secretary of State on June 4, 2026, establishing the "voting rights, powers, preferences and privileges" of the Series C Preferred Stock (8-K filing, 2026-06-05).
Dividend and Restriction Structure
The Series C Preferred Stock carries a 7.25% fixed rate that will reset at a future date, though the specific reset terms were not detailed in the filing excerpt. The preferred shares are non-cumulative, meaning missed dividends do not accumulate.
Under the terms disclosed, "the ability of the Company to pay dividends on, make distributions with respect to, or to repurchase, redeem or otherwise acquire its common stock or any preferred stock ranking on parity with or junior to the Series C Preferred Stock, is subject to certain restrictions" if Synchrony fails to declare and pay or set aside dividends on the Series C Preferred Stock for the preceding dividend period (8-K filing, 2026-06-05). This structure provides preferred shareholders with priority over common stockholders in dividend payments.
Underwriting Syndicate
The company entered into an underwriting agreement on June 2, 2026, with "BofA Securities, Inc., Barclays Capital Inc. and Morgan Stanley & Co. LLC as representatives of the several underwriters" (8-K filing, 2026-06-05). The offering was conducted as a public offering pursuant to Synchrony's shelf registration statement on Form S-3 filed with the Securities and Exchange Commission.
Depositary Arrangement
Computershare Inc. and Computershare Trust Company, N.A., collectively serve as depositary for the offering under a Deposit Agreement dated June 5, 2026 (8-K filing, 2026-06-05). Holders of the depositary shares "will be entitled to all proportional rights and preferences of the Series C Preferred Stock (including, dividend, voting, redemption and liquidation rights)" (8-K filing, 2026-06-05).
Context
The preferred stock issuance provides Synchrony Financial with additional Tier 1 capital, a common structure for financial institutions to strengthen their regulatory capital positions. As a major consumer finance company with a market capitalization around $24 billion, Synchrony's ability to access capital markets at a 7.25% rate reflects current market conditions for financial institution preferred securities. The perpetual nature of the security means it has no maturity date, though the company typically retains redemption rights after an initial non-call period.
This article was generated by MarginX from the 8-K filing published 2026-06-05. It is not investment advice.