State Street Corporation (NYSE:STT), a leading financial services provider, has successfully issued and sold 850,000 depositary shares, each representing a 1/100th ownership interest in its Series J Preferred Stock, in a public offering. The transaction took place on Wednesday, July 24, 2024, and was facilitated under a registration statement and related prospectus supplement filed with the Securities and Exchange Commission (SEC).
The newly issued Series J Preferred Stock, which carries a liquidation preference of $100,000 per share, translates to $1,000 per depositary share. This initiative is expected to yield net proceeds of approximately $842.2 million for State Street, after accounting for the underwriting discount and estimated offering expenses. The depositary shares were sold pursuant to an underwriting agreement dated July 17, 2024, between State Street and the representatives of the underwriters, Goldman Sachs & Co. LLC and UBS Securities LLC.
In conjunction with this offering, a deposit agreement was executed on the same day with Equiniti Trust Company, LLC, serving as the depositary. This agreement governs the terms between State Street, Equiniti Trust Company, and the holders of the depositary receipts.
State Street's issuance of the Series J Preferred Stock follows the filing of Articles of Amendment with the Secretary of the Commonwealth of Massachusetts on July 18, 2024. The details of the deposit agreement, Articles of Amendment, the form of certificate of the Series J Preferred Stock, and the underwriting agreement are all disclosed in the exhibits of State Street’s Current Report on Form 8-K, filed with the SEC on July 23, 2024. Legal counsel Wilmer Cutler Pickering Hale and Dorr LLP has provided an opinion on the legality of the issued depositary shares, confirming their validity upon issuance and sale.
InvestingPro Insights
State Street Corporation (NYSE:STT) has demonstrated a proactive approach to capital management, as evidenced by the recent issuance of its Series J Preferred Stock. In light of this development, it's worth noting key metrics and insights from InvestingPro that could provide investors with a deeper understanding of the company's financial health and performance. State Street's market capitalization stands robust at $24.81 billion, reflecting its significant presence in the financial services sector.
An attractive aspect for income-focused investors is State Street's commendable track record of raising its dividend for 13 consecutive years, a testament to its commitment to shareholder returns. In addition, the company has maintained dividend payments for an impressive 54 consecutive years, which is indicative of its financial stability and reliability. These feats are complemented by a healthy dividend yield of 3.63% as of mid-2024.
Investors may also take interest in State Street's earnings prospects, as 8 analysts have revised their earnings estimates upwards for the upcoming period. This optimism is supported by the company's positive performance, with a notable 15.98% return over the last month. For those considering an investment in State Street, the company's P/E ratio stands at 15.44, with an adjusted P/E ratio for the last twelve months as of Q2 2024 at 13.9, suggesting a potentially favorable valuation relative to earnings.
For more in-depth analysis and additional InvestingPro Tips, which include insights into management's share buyback activities and the company's stock price volatility, visit Investing.com/pro/STT. Take advantage of the exclusive offer with coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With 9 additional tips available on InvestingPro, investors can gain a comprehensive view of State Street's strategic financial moves and market performance.
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