Bread Financial Sells 5 Million Preferred Depositary Shares With A 9.375% Dividend
The card lender's Series C offering settled Tuesday, with underwriters holding an option on 750,000 more shares.
Bread Financial, which issues co-brand and private label credit cards for retail partners, issued and sold 5 million depositary shares of a new 9.375% Series C preferred stock on Tuesday, according to an 8-K. The underwriting agreement was dated October 27.
Terms of the Series C stock
Each depositary share represents a 1/40th interest in a preferred share carrying a $1,000 liquidation preference. At $25 per depositary share, the base offering totals $125 million, or $143.75 million if underwriters take all of their option.
The dividend is a fixed 9.375%, non-cumulative, until the first reset date of December 15, 2031. After that it resets every five years to the five-year U.S. Treasury rate plus 4.535 percentage points, and the company may redeem the stock at $25 per depositary share starting on the first reset date.
The first dividend is payable March 15, 2027.
The Certificate of Designations was filed with Delaware on Monday and took effect Tuesday.
What the underwriters paid
Underwriters agreed to buy at $24.2125 per depositary share, a 3.150% discount to the $25 price, which leaves the company $121,062,500 before expenses. Morgan Stanley, Keefe, Bruyette & Woods, RBC Capital Markets, UBS Securities and Wells Fargo Securities are the representatives.
They also hold an option on up to 750,000 more depositary shares at the same price, exercisable to cover over-allotments. The 8-K counts the 30 days from October 27.
A lender adds to its preferred stack
Bread Financial offers credit cards, installment loans and savings accounts. As of December 31, 2025, it reported $18.8 billion in loans across about 34 million open accounts, and its partners include Caesars, Dell Technologies, Signet and Ulta.
It already has Series A and Series B preferred depositary shares listed on the NYSE, carrying 8.625% and 8.875% rates. The company intends to list the new shares as "BFH PrC," with trading expected within 30 days of the initial closing.
If the company skips a dividend for the prior period, its ability to pay dividends on junior stock, or to buy back parity or junior stock, becomes restricted.
The first Series C dividend is due March 15, 2027, and the redemption right opens December 15, 2031.
Sources
- 8-K Filing — BREAD FINANCIAL HOLDINGS, INC. (BFH) — SEC EDGAR
- Exhibit d163000dex11.htm — BREAD FINANCIAL HOLDINGS, INC. 8-K exhibit — SEC EDGAR
