Key sales indirect retail auto loan portfolio; commits to an accelerated share buyback program
CLEVELAND, September 10, 2021 / PRNewswire / – KeyCorp (NYSE: KEY) today announced that KeyBank has sold its portfolio of indirect retail auto loans and that KeyCorp has entered into an Accelerated Share Buyback (ASR) program.
“We are committed to returning capital to our shareholders and our share buyback program is an important part of that commitment,” said Don Kimble, Chief Financial Officer of KeyCorp. “The ASR transaction, which was facilitated by the capital generated from the sale of the indirect retail auto loan portfolio, once again demonstrates our commitment to maximizing shareholder value.”
Auto loan portfolio
At September 10, 2021, KeyBank sold its $ 3.2 billion portfolio of indirect retail auto loans to a vehicle managed by a wholly owned subsidiary of Waterfall Asset Management, LLC. Along with the sale, KeyBank bought $ 2.8 billion senior notes of a securitization secured by the ceded loans. KeyBank will continue to be the manager of auto loans.
KeyBank was advised on the transaction by Morgan Stanley & Co. LLC as senior structuring and financing advisor and KeyBanc Capital Markets, as well as legal counsel Sidley Austin LLP. Waterfall Asset Management, LLC was advised in connection with the transaction by legal counsel Morgan, Lewis & Bockius LLP.
Accelerated share buyback program
At September 10, 2021, KeyCorp has entered into an accelerated share buyback agreement with Goldman Sachs & Co. LLC to buy back up to $ 585 million of its outstanding common shares. The ASR is part of the share buyback program previously disclosed and approved by the Board of Directors. Under the ASR agreement, KeyCorp will initially receive delivery of approximately 23.5 million common shares on September 14, 2021, representing approximately 2.5% of the number of common shares outstanding. Initial delivery is based on the closing common share price of $ 19.87, to September 10, 2021.
The total number of shares KeyCorp will repurchase under the ASR program will be based on the volume weighted average price of the ordinary share during the term of the ASR agreement, less a discount, and subject to potential adjustments. in accordance with the terms and conditions of the ASR Agreement. The final settlement of share buybacks under the ASR agreement is expected to be finalized in the fourth quarter of 2021.
KeyCorp’s roots go back almost 200 years to Albany, New York. Based at Cleveland, Ohio, Key is one of the nation’s largest banking financial services companies, with assets of approximately $ 181.1 billion at June 30, 2021. Key provides deposit, loan, cash management and investing services to individuals and businesses in 15 states under the KeyBank National Association name through a network of more than 1,000 branches and approximately 1,300 ATMs. Key also provides a wide range of sophisticated investment and corporate banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to mid-market firms. in selected sectors across United States under the trade name KeyBanc Capital Markets. For more information visit https://www.key.com. KeyBank is a member of the FDIC.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as âoutlookâ, âgoalâ, âobjectiveâ, âplanâ, ââ, â anticipate â,â intend â,â project â,â believe â,â estimate âand other words with similar meaning. Forward-looking statements represent management’s current expectations and forecasts regarding future events. If the underlying assumptions prove to be incorrect or if unknown risks or uncertainties arise, actual results could differ materially from those projections or expectations. Factors that could cause Key’s actual results to differ from those described in forward-looking statements can be found in KeyCorp’s Form 10-K for the year then ended. December 31, 2020, as well as in KeyCorp’s subsequent filings with the SEC, all of which have been filed with the Securities and Exchange Commission and are available on Key’s website (www.key.com/ir) and on the website of the Securities and Exchange Commission (www.sec.gov). Forward-looking statements speak only as of the date on which they are made and Key assumes no obligation to update forward-looking statements to reflect new information or future events.