UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
(Date of report; date of earliest event reported)
April 22, 2021
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(Exact name of registrant as specified in its charter)
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Emerging growth company
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On April 19, 2021, Ally Financial Inc. (“Ally”) entered into an underwriting agreement (the “Underwriting Agreement”) with Barclays Capital Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC and RBC Capital Markets, LLC, as representatives of the several underwriters named therein (collectively, the “Underwriters”), relating to the offer and sale in an underwritten offering of 1,350,000 shares of Ally’s 4.700% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”). The shares of Series B Preferred Stock were sold at a public offering price of $1,000 per share and the Underwriters agreed to purchase the shares from Ally at a discount of $10 per share. On April 22, 2021, Ally closed the public offering of the Series B Preferred Stock pursuant to the Underwriting Agreement.
Ally made certain customary representations, warranties and covenants in the Underwriting Agreement concerning Ally and its subsidiaries and the registration statement, prospectus, prospectus supplements and other documents and filings relating to the offering of the shares of Series B Preferred Stock. In addition, Ally has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The foregoing description of the Underwriting Agreement is qualified in its entirety by reference to that agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The offering was made, and the Series B Preferred Stock was issued, pursuant to Ally’s effective registration statement on Form S-3 (File No. 333-234810) previously filed with the SEC, as supplemented by the final prospectus supplement relating to the offering of Series B Preferred Stock filed with the SEC on April 21, 2021.
| Item 3.03 | Material Modification to Rights of Security Holders. |
On April 21, 2021, Ally filed a Certificate of Designation (the “Certificate”) with the Secretary of State of the State of Delaware, establishing the rights, preferences, privileges, qualifications, restrictions and limitations of the Series B Preferred Stock. The Certificate was filed in connection with the Underwriting Agreement.
The Series B Preferred Stock ranks, with respect to the payment of dividends and distributions upon Ally’s liquidation, dissolution or winding-up, respectively: (i) senior to Ally’s common stock and to any class or series of its capital stock it may issue in the future that is not expressly stated to be on parity with or senior to the Series B Preferred Stock with respect to such dividends and distributions; (ii) on parity with any class or series of Ally’s capital stock it has issued and may issue in the future that is expressly stated to be on parity with the Series B Preferred Stock with respect to such dividends and distributions; and (iii) junior to any class or series of Ally’s capital stock it may issue in the future that is expressly stated to be senior to the Series B Preferred Stock with respect to such dividends and distributions, if the issuance is approved by the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock.
Under the terms of the Series B Preferred Stock, the ability of Ally to pay dividends on, make distributions with respect to, or to redeem, purchase or acquire Ally’s common stock or any other stock ranking junior to or on a parity with the Series B Preferred Stock, is subject to restrictions in the event that Ally has not declared and either paid or set aside a sum sufficient for payment of full dividends on the Series B Preferred Stock for the most recently completed dividend period.
The terms of the Series B Preferred Stock are more fully described in the Certificate, which is included as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated by reference herein.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year |
On April 21, 2021, Ally filed the Certificate with the Secretary of State of the State of Delaware, amending Ally’s Amended and Restated Certificate of Incorporation by establishing Ally’s Series B Preferred Stock, consisting initially of 1,350,000 authorized shares, $0.01 par value and $1,000 liquidation value per share.
Ally will pay dividends on the Series B Preferred Stock only when, as, and if declared by its board of directors (the “Board”) or a duly authorized committee of Ally’s board and to the extent that Ally has lawfully available funds to pay dividends. Dividends on the Series B Preferred Stock will accrue at a rate per annum equal to (i) 4.700% from the settlement date to, but excluding, May 15, 2026 (the “first reset date”); and (ii) for each reset period from, and
including, May 15, 2026, the five-year treasury rate, as defined in the Certificate, as of the most recent reset dividend determination date plus 3.868%. A “reset date” means the first reset date and each date falling on the fifth anniversary of the preceding reset date. Reset dates, including the first reset date, will not be adjusted for business days. A “reset period” means the period from and including the first reset date to, but excluding, the next following reset date and thereafter each period from and including each reset date to, but excluding, the next following reset date. A “reset dividend determination date” means, in respect of any reset period, the day falling three business days prior to the beginning of such reset period
The Series B Preferred Stock has a liquidation preference of $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. Liquidating distributions will be made on the Series B Preferred Stock only to the extent Ally’s assets are available after satisfaction of all liabilities and obligations to creditors and subject to the rights of holders of any shares of capital stock ranking senior to the Series B Preferred Stock as to liquidation rights and pro rata as to any other shares of Ally’s capital stock ranking on a parity with the Series B Preferred Stock as to such distributions. After payment of the full amount of the liquidating distribution, holders of the Series B Preferred Stock are not entitled to any further participation in any distribution of Ally’s assets.
The Series B Preferred Stock does not have a stated maturity date, will not be subject to any sinking fund or any other obligation of Ally for their repurchase, redemption or retirement and will be perpetual unless redeemed at Ally’s option. Ally may redeem the Series B Preferred Stock at its option at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends to, but excluding the date of redemption, without accumulation of undeclared dividends, (i) in whole or in part, from time to time, on any dividend payment date on or after May 15, 2026 or (ii) in whole but not in part, within 90 days following the occurrence of a “regulatory capital treatment event” (as described in the Certificate). Any redemption of the Series B Preferred Stock is subject to prior approval of the Board of Governors of the Federal Reserve System or any successor appropriate federal banking agency. The Series B Preferred Stock has no preemptive or conversion rights.
The Series B Preferred Stock has no voting rights except with respect to certain changes in the terms of the Series B Preferred Stock and in the case of certain dividend non-payments.
The terms of the Series B Preferred Stock are more fully described in the Certificate, which is included as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
The following exhibits are filed as part of this Report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Ally Financial Inc. (Registrant) | ||||||
| Date: April 22, 2021 | By: | /s/ David J. DeBrunner | ||||
| Name: | David J. DeBrunner | |||||
| Title: | Controller and Chief Accounting Officer | |||||