Citizens Financial Readies for Secondary and Debt Offerings

Banking, finance, and taxes

Published: July 21, 2015 11:55 am

Citizens Financial Group Inc. (NYSE: CFG) has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) for a secondary offering. No terms were given in the filing, but the offering is valued up to $110 million. The sole underwriter for this offering is Morgan Stanley.

Separately, the company also filed with the SEC for the issuance of senior notes due in 2025. Likewise there were no real terms set in this filing, but it is valued up to $100 million at this point. The global coordinator in this instance is Merrill Lynch.

At the end of March 2015, this company was the 13th largest retail bank holding company in the United States, according to SNL Financial, with total assets of $136.5 billion. It delivers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions.

The company’s 17,800 employees operate through approximately 1,200 branches and about 3,200 automated teller machines (ATM) in an 11-state footprint across the New England, Mid-Atlantic and Midwest regions. It also has online, telephone and mobile banking platforms.

At the end of the first quarter, Citizens Financial’s 11-state branch banking footprint contained about 30 million households and 3.1 million businesses, according to SNL Financial, and roughly 75% of its loans were to customers located in the footprint.

The company described its financials in the filing as:

As of March 31, 2015, we had loans and leases and loans held for sale of $94.9 billion, deposits of $99.0 billion and stockholders’ equity of $19.6 billion, and we generated revenues of $1.2 billion for the three months ended March 31, 2015. We operate our business through two operating segments: Consumer Banking and Commercial Banking. As of March 31, 2015, the contributions of Consumer Banking and Commercial Banking to the loans and leases and loans held for sale in our operating segments were approximately 55% and 45%, respectively.

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Citizens Financial will not receive any proceeds from the secondary offering of its shares. Instead selling shareholder RBSG International Holdings and its related funds will be offering up the shares. As for the senior notes, the company only said it would use the proceeds for general corporate purposes.

Shares of Citizens Financial were down 3.5% at $26.97 after a disappointing earnings report Tuesday morning. The stock has a consensus analyst price target of $27.86 and a 52-week trading range of $21.35 to $28.71.

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