Provident Financial Services sold $175 million of 6.50% fixed-to-floating rate subordinated notes due 2036, netting $172.2 million. The company will use proceeds to repay $150 million of 2.875% notes due 2031 and $20 million of variable rate notes due 2033, reshaping its subordinated Debt stack ahead of the notes' 2031 rate reset.

Key Highlights

  • The notes carry a fixed 6.50% coupon through September 1, 2031, then convert to a floating rate through the September 1, 2036 maturity.
  • Underwriters Piper Sandler, Keefe, Bruyette & Woods and Performance Trust Capital Partners charged a 1.125% discount, equal to $1,968,750 on the $175,000,000 offering.
  • The notes will not trade on any securities exchange or Quotation system, leaving no established Secondary Market for holders.

The offering generated approximately $172.2 million in net proceeds after Underwriting costs and expenses. Underwriters delivered the notes to purchasers on or about August 24, 2026.

Coupon Structure And Maturity

The notes bear interest at 6.50% per annum from issuance through September 1, 2031, paid semi-annually each March 1 and September 1, with the first payment due March 1, 2027. After September 1, 2031, and until the September 1, 2036 Maturity date or any earlier redemption, the rate shifts to a floating structure. Notes are denominated in minimum increments of $1,000 with additional multiples of $1,000.

Provident Financial Services (NYSE: PFS) filed the offering under a shelf registration numbered 333-275213, tied to a base prospectus dated October 30, 2023.

Pricing And Underwriting Costs

The notes priced at 100.000% of face value, putting the full offering at $175,000,000 before deductions. Underwriters applied a discount of 1.125%, equal to $1,968,750 across the offering. That left proceeds of 98.875%, or $173,031,250, before additional expenses were subtracted to arrive at the estimated $172.2 million net figure.

Piper Sandler and Keefe, Bruyette & Woods, A Stifel Company, served as joint active bookrunning managers, with Performance Trust Capital Partners, LLC acting as co-manager.

Debt Repayment Plan

Provident Financial Services intends to direct the bulk of net proceeds toward retiring two existing debt instruments. Both repayments will include accrued interest owed on the respective instruments. Remaining proceeds beyond these repayments are designated for general corporate purposes.

No Exchange Listing

No established public market for the notes currently exists, and the notes carry subordinated status behind Provident Financial Services' existing and future senior indebtedness at the Holding Company level. Wilmington Trust, National Association, serves as Trustee for the notes under the governing indenture, which is subject to New York law.

Source(s)

  • https://www.sec.gov/Archives/edgar/data/1178970/000155278126000460/e26360_pfs-424b5.htm