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Schwab (NYSE: SCHW) sells $1.48B in 6.100% Series L preferred shares

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(Moderate)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

The Charles Schwab Corporation completed an offering of 1,500,000 depositary shares, each representing a 1/100th interest in a share of 6.100% fixed-rate reset non-cumulative perpetual preferred stock, Series L, with a $100,000 liquidation preference per share (equivalent to $1,000 per Depositary Share).

The transaction generated approximately $1,480 million in net proceeds after underwriting discounts, commissions and estimated expenses. Holders of the Depositary Shares receive proportional dividend, voting, redemption and liquidation rights of the Series L Preferred Stock. Schwab entered into an Underwriting Agreement with a syndicate of major investment banks and filed a Certificate of Designations in Delaware, which defines the terms and restrictions of the Series L Preferred Stock, including limits on paying dividends or repurchasing parity or junior stock if dividends on the Series L are not declared and paid or set aside for the prior period.

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Insights

Schwab adds $1.48B of perpetual preferred capital with fixed‑rate reset terms.

The Charles Schwab Corporation issued 1,500,000 Depositary Shares tied to 6.100% fixed-rate reset non-cumulative perpetual preferred stock, Series L, with net proceeds of $1,480 million. Each Depositary Share represents a 1/100th interest in a share with a $100,000 liquidation preference.

This structure provides additional Tier 1-like capital without common equity dilution, but at a fixed 6.100% dividend rate that can reset later under the terms described in the Certificate of Designations. Dividends are non-cumulative, which generally favors the issuer in stress scenarios.

The terms restrict Schwab from paying dividends on or repurchasing its common and parity or junior preferred stock if it has not declared and paid, or set aside funds for, dividends on the Series L for the prior period. Future filings describing reset mechanics and any call features will help clarify the long-term cost and flexibility of this capital.

Item 3.03 Material Modification to Rights of Security Holders Securities
A change was made that materially affects the rights of existing shareholders (e.g., dividend rights, voting rights).
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year Governance
The company amended its charter documents, bylaws, or changed its fiscal year.
Item 8.01 Other Events Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Depositary Shares issued 1,500,000 depositary shares Each representing 1/100th of a Series L preferred share
Dividend rate 6.100% Fixed-rate reset non-cumulative perpetual preferred stock, Series L
Liquidation preference per preferred share $100,000 per share Series L Preferred Stock liquidation preference
Liquidation preference per Depositary Share $1,000 per Depositary Share Equivalent to 1/100th of $100,000 liquidation preference
Net proceeds $1,480 million Net of underwriting discounts, commissions and estimated expenses
Certificate of Designations effective date April 22, 2026 Filed with Delaware Secretary of State for Series L terms
fixed-rate reset financial
"6.100% fixed-rate reset non-cumulative perpetual preferred stock, Series L"
A fixed-rate reset is a feature of some bonds or preferred shares where the interest or dividend starts at a fixed rate for an initial period and then is re‑set at specific future dates to a new fixed rate based on market yields or a formula. It matters to investors because it combines the predictability of a fixed payment with periodic adjustments that reflect current interest rates, like a thermostat that keeps payments in line with prevailing market conditions and helps manage interest-rate risk.
non-cumulative financial
"6.100% fixed-rate reset non-cumulative perpetual preferred stock, Series L"
Non-cumulative describes a type of dividend or payment right where any missed distributions are not tracked or owed later; if a company skips a payment, investors do not receive that skipped amount in the future. Think of it like a one-time coupon that expires if not used: it can boost potential income when paid, but offers no catch-up protection, so investors face greater income uncertainty and should price in higher risk or lower yield expectations.
perpetual preferred stock financial
"non-cumulative perpetual preferred stock, Series L, $0.01 par value per share"
A perpetual preferred stock is a type of share that behaves like a forever-lasting, fixed-income investment: it pays regular dividends and has no set maturity date, yet it represents ownership rather than a loan. It ranks ahead of common stock for dividend payments and in liquidation, so investors treat it as a mix between a bond and an equity stake; its value depends largely on the issuer’s credit and prevailing interest rates.
Certificate of Designations regulatory
"CSC filed a Certificate of Designations establishing the rights of the Series L Preferred Stock"
A certificate of designations is a formal legal document that spells out the specific rights and rules attached to a particular class of stock, most often preferred shares. It tells investors who gets paid first, what dividends or conversion rights exist, and any voting or liquidation priorities—like an instruction sheet that decides which shareholders get preference if a company pays out or is sold. Those terms directly affect a security’s value and risk.
Underwriting Agreement financial
"CSC entered into an Underwriting Agreement with Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, TD Securities (USA) LLC and Wells Fargo Securities, LLC"
An underwriting agreement is a contract where a company selling new stocks or bonds hires financial firms to buy those securities and resell them to investors. It matters because the agreement sets the offering price, number of securities, fees and which party bears the risk if sales fall short—think of it as a promise that the sale will happen and a roadmap investors can use to understand how the new securities reach the market.
liquidation preference financial
"with a liquidation preference of $100,000 per share (equivalent to $1,000 per Depositary Share)"
A liquidation preference is a rule that determines who gets paid first and how much they receive when a company is sold, goes bankrupt, or distributes its assets. It gives certain investors a priority claim—often returning their original investment plus any agreed multiple—before other owners receive money, which shapes how much common shareholders and founders ultimately get; think of it as a front-of-the-line pass that affects payout order and investor returns.
Understanding 8-K Material Events →
SCHWAB CHARLES CORP false 0000316709 --12-31 0000316709 2026-04-20 2026-04-20 0000316709 us-gaap:CommonStockMember 2026-04-20 2026-04-20 0000316709 us-gaap:SeriesDPreferredStockMember 2026-04-20 2026-04-20 0000316709 schw:SeriesJPreferredStockMember 2026-04-20 2026-04-20
 
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

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 20, 2026

 

 

The Charles Schwab Corporation

(Exact name of registrant as specified in its charter)

 

 

Commission File Number: 1-9700

 

Delaware   94-3025021
(State or other jurisdiction of
incorporation or organization)		   (I.R.S. Employer
Identification No.)

3000 Schwab Way, Westlake, TX 76262

(Address of principal executive offices, including zip code)

(817) 859-5000

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading
Symbol(s)

  

Name of each exchange
on which registered

Common Stock - $.01 par value per share   SCHW   New York Stock Exchange
Depositary Shares, each representing a 1/40th ownership interest in a share of 5.95% Non-Cumulative Preferred Stock, Series D   SCHW PrD   New York Stock Exchange
Depositary Shares, each representing a 1/40th ownership interest in a share of 4.450% Non-Cumulative Preferred Stock, Series J   SCHW PrJ   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 
 

Introductory Note

On April 22, 2026, The Charles Schwab Corporation (“CSC”) issued and sold 1,500,000 depositary shares (“Depositary Shares”), each representing a 1/100th ownership interest in a share of 6.100% fixed-rate reset non-cumulative perpetual preferred stock, Series L, $0.01 par value per share, with a liquidation preference of $100,000 per share (equivalent to $1,000 per Depositary Share) (the “Series L Preferred Stock”). The net proceeds of the offering of the 1,500,000 Depositary Shares were approximately $1,480 million, after deducting underwriting discounts and commissions and estimated offering expenses. This issuance is referred to as the “Preferred Issuance.”

 

Item 3.03

Material Modification to Rights of Security Holders

In connection with the Preferred Issuance, CSC filed a Certificate of Designations (the “Certificate of Designations”) with the Secretary of State of the State of Delaware, establishing the voting rights, powers, preferences and privileges, and the relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of the Series L Preferred Stock on April 22, 2026. Holders of the Depositary Shares will be entitled to all proportional rights and preferences of the Series L Preferred Stock (including dividend, voting, redemption and liquidation rights).

Under the terms of the Series L Preferred Stock, the ability of CSC to pay dividends on, make distributions with respect to, or to repurchase, redeem or acquire its common stock, nonvoting common stock or any preferred stock ranking on parity with or junior to the Series L Preferred Stock, is subject to restrictions in the event that CSC does not declare and either pay or set aside a sum sufficient for payment of dividends on the Series L Preferred Stock for the immediately preceding dividend period.

The terms of the Series L Preferred Stock are more fully described in the Certificate of Designations 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

The Certificate of Designations became effective upon filing with the Secretary of State of the State of Delaware. The terms of the Series L Preferred Stock are more fully described in the Certificate of Designations which is included as Exhibit 3.1 to this Current Report on Form 8–K and is incorporated by reference herein.

 

Item 8.01

Other Events

On April 20, 2026, in connection with the Preferred Issuance, CSC entered into an Underwriting Agreement (the “Underwriting Agreement”) with Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, TD Securities (USA) LLC and Wells Fargo Securities, LLC, as the representatives of the several underwriters named therein (collectively, the “Underwriters”), under which CSC agreed to sell to the Underwriters 1,500,000 shares of Depositary Shares, each representing a 1/100th ownership interest in a share of Series L Preferred Stock.

The Underwriting Agreement contains customary representations, warranties and agreements of CSC, conditions to closing, indemnification rights and obligations of the parties, and termination provisions. Under the terms of the Underwriting Agreement, CSC agreed to indemnify the Underwriters against certain specified types of liabilities, including liabilities under the Securities Act of 1933, as amended, and to contribute to payments the Underwriters may be required to make in respect of these liabilities.

The offering was made pursuant to the prospectus supplement dated April 20, 2026 and the accompanying prospectus dated December 1, 2023, filed with the Securities and Exchange Commission pursuant to CSC’s Registration Statement.

Copies of (a) the Underwriting Agreement, (b) the Certificate of Designations to which the Form of Certificate Representing the Series L Preferred Stock is attached as Exhibit A, (c) the Deposit Agreement, dated April 22, 2026, between CSC and Equiniti Trust Company, LLC, as Depositary, to which the Form of Depositary Share Receipt is attached as Exhibit A and (d) a validity opinion with respect to the Depositary Shares and the Series L Preferred Stock are attached as Exhibits 1.1, 3.1, 4.1 and 5.1, respectively, to this Current Report on Form 8-K and are incorporated by reference into CSC’s Registration Statement.

Item 9.01

Financial Statements and Exhibits

(d)  Exhibits

 

Exhibit No.    Description
1.1    Underwriting Agreement, dated April 20, 2026, by and among CSC and Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Wells Fargo Securities, LLC, TD Securities (USA) LLC and Wells Fargo Securities, LLC, as the representatives of the several underwriters named therein.
3.1    Certificate of Designations of 6.100% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series L, dated April 22, 2026, of CSC (including the form of 6.100% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series L Certificate of CSC attached as Exhibit A thereto).
4.1    Deposit Agreement, dated April 22, 2026, between CSC and Equiniti Trust Company, LLC, as Depositary (including the form of Depositary Share Receipt attached as Exhibit A thereto).
5.1    Opinion of Wachtell, Lipton, Rosen & Katz, dated April 22, 2026.
23.1    Consent of Wachtell, Lipton, Rosen & Katz, dated April 22, 2026 (included in Exhibit 5.1).
104    Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Signature(s)

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.

 

      THE CHARLES SCHWAB CORPORATION
Date: April 22, 2026     By:  

/s/ Michael Verdeschi

      Michael Verdeschi
      Managing Director and Chief Financial Officer

Source: View Original Filing on SEC EDGAR

FAQ

What type of securities did The Charles Schwab Corporation (SCHW) issue?

The Charles Schwab Corporation issued 1,500,000 depositary shares, each representing a 1/100th interest in a share of 6.100% fixed-rate reset non-cumulative perpetual preferred stock, Series L, with a liquidation preference of $100,000 per share, or $1,000 per Depositary Share.

How much capital did SCHW raise from the Series L preferred offering?

Schwab raised approximately $1,480 million in net proceeds from selling 1,500,000 Depositary Shares. This figure is after deducting underwriting discounts, commissions, and estimated offering expenses related to the Series L preferred stock issuance.

What rights do holders of SCHW’s Series L Depositary Shares receive?

Holders of the Depositary Shares are entitled to all proportional rights and preferences of the underlying Series L Preferred Stock, including dividend, voting, redemption, and liquidation rights, in line with the terms set out in the Certificate of Designations filed in Delaware.

Are dividends on SCHW’s Series L preferred stock cumulative or non-cumulative?

Dividends on the Series L preferred stock are non-cumulative. If Schwab does not declare dividends for a period, it is not obligated to pay them later, which generally benefits the issuer compared with cumulative preferred structures.

What restrictions are tied to SCHW’s ability to pay common stock dividends?

Under the Series L terms, Schwab’s ability to pay dividends on, or repurchase, its common, nonvoting common, or parity and junior preferred stock is restricted if it has not declared and either paid, or set aside funds to pay, dividends on the Series L for the immediately preceding dividend period.

Which banks underwrote SCHW’s Series L preferred stock offering?

Citigroup Global Markets, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, TD Securities (USA) LLC, and Wells Fargo Securities, LLC acted as representatives of the several underwriters under the Underwriting Agreement dated April 20, 2026.

Filing Exhibits & Attachments

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