KeyCorp (KEY) Announces Accelerated $585M Share Buyback

KeyCorp (NYSE: KEY) announced today that KeyBank has sold its indirect retail auto loan portfolio and that KeyCorp has entered into an accelerated share repurchase (ASR) program.

"We are committed to returning capital to our shareholders and our share repurchase program is an important part of that commitment," said Don Kimble, Chief Financial Officer of KeyCorp. "The ASR transaction, which was aided by the capital generated from the sale of the indirect retail auto loan portfolio, further demonstrates our commitment to maximizing shareholder value."

Auto Loan Portfolio

On September 10, 2021, KeyBank sold its $3.2 billion indirect retail auto loan portfolio to a vehicle managed by a wholly-owned subsidiary of Waterfall Asset Management, LLC. Concurrently with the sale, KeyBank purchased $2.8 billion of senior notes from a securitization collateralized by the sold loans. KeyBank will remain the servicer of the auto loans.

KeyBank was advised on the transaction by Morgan Stanley & Co. LLC as lead structuring and financial advisor and KeyBanc Capital Markets, as well as by legal counsel Sidley Austin LLP. Waterfall Asset Management, LLC was advised on the transaction by legal counsel Morgan, Lewis & Bockius LLP.

Accelerated Share Repurchase Program

On September 10, 2021, KeyCorp entered into an accelerated share repurchase agreement with Goldman Sachs & Co. LLC to repurchase up to $585 million of its outstanding shares of common stock. The ASR is part of KeyCorp's previously disclosed, board-approved share repurchase program. Under the ASR agreement, KeyCorp will initially receive delivery of approximately 23.5 million shares of common stock on September 14, 2021, representing approximately 2.5% of the number of shares of common stock outstanding. Initial delivery is based on the closing price of the common stock of $19.87, on September 10, 2021.

The total number of shares that KeyCorp will repurchase under the ASR program will be based on the volume-weighted average price of the common stock during the term of the ASR agreement, less a discount, and subject to potential adjustments pursuant to the terms and conditions of the ASR agreement. The final settlement of the share repurchases under the ASR agreement is expected to be completed in the fourth quarter of 2021.

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