Invesco Takes On A $1.5 Billion Loan To Buy Back MassMutual's Preferred Stock At A 12.5% Premium
The asset manager paid a 12.5% premium on the shares, and MassMutual keeps $1 billion of preferred stock.
Invesco, the investment manager that oversees about $2.2 trillion as of December 31, 2025, repurchased $1.5 billion of its preferred shares from Massachusetts Mutual Life Insurance Company, paying a 12.5% premium and funding it with a new five-year term loan, according to an 8-K filed Tuesday.
A premium, paid with borrowed money
Invesco agreed to the deal on Friday. The shares are its 5.9% fixed-rate non-cumulative perpetual Series A preference shares, and the premium was set on their liquidation preference of $1,000 per share.
The buyback was completed Monday, October 26, the loan's closing date. Invesco and a subsidiary, Invesco Finance, Inc., borrowed the full $1.5 billion that day under an unsecured loan guaranteed by the parent. Bank of America is the administrative agent for the lenders.
Invesco can raise the loan to as much as $2.0 billion under certain conditions, though no lender is obliged to supply the extra money.
Loan terms and covenants
Interest runs at Term SOFR plus a margin. At the company's current credit ratings that margin is 1.350%. Invesco must pay down 2.5% of the loan each quarter beginning on the third anniversary of the closing date, with the balance due October 26, 2031.
The loan imposes two financial tests, checked quarterly. Debt to EBITDA cannot exceed 3.25 to 1, and interest coverage must be at least 4.00 to 1. After an acquisition costing more than $500 million, the borrower may lift the leverage cap to 3.75 to 1 for up to four quarters. Debt can be reduced by up to $600 million of freely available cash when calculating the ratio.
The agreement also restricts liens, mergers, asset sales and debt taken on by most subsidiaries, though many of those limits carry thresholds and exceptions.
MassMutual stays a major holder
MassMutual owns about 18.5% of Invesco's common shares and will still hold $1 billion of liquidation preference in the preferred stock.
Alongside the buyback, the two sides amended their shareholder agreement, which dates to May 24, 2019. The change lowers one ownership test for the definition of "Governance Termination Date": the preferred stock MassMutual must hold falls from $2.0 billion to $1.0 billion.
Invesco sells funds to retail investors, mainly through intermediaries such as broker-dealers and banks, and to institutions such as pension funds and insurers. Its 10-K showed $1,515.7 billion of retail assets and $654.2 billion of institutional assets at year-end 2025.
Loan amortization starts on the third anniversary of the October 26, 2026 closing, and whatever remains comes due in October 2031.
Sources
- 8-K Filing — Invesco Ltd. (IVZ) — SEC EDGAR
