SUBJECT TO COMPLETION, DATED MARCH 23, 2021
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated December 4, 2020)
The Charles Schwab Corporation
Depositary Shares, Each Representing a 1/40th
Interest in a Share of %
Non-Cumulative Perpetual Preferred Stock, Series J
We are offering depositary shares, each
representing a 1/40th ownership interest in a share of % Non-Cumulative Perpetual Preferred Stock, Series J, $0.01
par value, with a liquidation preference of $1,000 per share (equivalent to $25 per depositary share) (the Series J Preferred Stock). The depositary shares are represented by depositary receipts. As a holder of depositary shares, you
will be entitled to all proportional rights and preferences of the Series J Preferred Stock (including dividend, voting, redemption and liquidation rights). You must exercise such rights through the depositary.
We will pay dividends on the Series J Preferred Stock, when, as, and if declared by our board of directors or a duly authorized committee of
our board of directors. Dividends will accrue on a non-cumulative basis and be payable from the date of initial issuance, at a rate
of % per annum, payable quarterly, in arrears, on the 1st day of March, June, September and December
of each year, commencing on June 1, 2021.
Dividends on the Series J Preferred Stock will not be cumulative. If our board of
directors or a duly authorized committee of our board of directors does not declare a dividend on the Series J Preferred Stock in respect of a dividend period, then no dividend shall be deemed to have accrued for such dividend period, be payable on
the applicable dividend payment date (as defined below), or be cumulative, and we will have no obligation to pay any dividend for that dividend period to the holder of Series J Preferred Stock, including the depositary, and no related distribution
will be made on the depositary shares, whether or not our board of directors or a duly authorized committee of our board of directors declares a dividend on the Series J Preferred Stock for any future dividend period.
We may redeem the Series J Preferred Stock at our option:
|
|
|
in whole or in part, from time to time, on any dividend payment date on or after June 1, 2026 at a
redemption price equal to $1,000 per share (equivalent to $25 per depositary share), plus any declared and unpaid dividends, without accumulation of any undeclared dividends; or
|
|
|
|
in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined
herein), at a redemption price equal to $1,000 per share (equivalent to $25 per depositary share), plus any declared and unpaid dividends, without accumulation of any undeclared dividends.
|
The Series J Preferred Stock will not have any voting rights, except as set forth under Description of Series J Preferred
StockVoting Rights on page S-19.
The depositary shares will not be insured by the
Federal Deposit Insurance Corporation or any other governmental agency or instrumentality. The depositary shares will not be savings accounts, deposits or other obligations of any bank.
The depositary shares are a new issue of securities with no established trading market. We intend to apply to list the depositary shares on
the New York Stock Exchange (NYSE) under the symbol SCHW PrJ. If the application is approved, we expect trading of the depositary shares on the NYSE to begin within the 30-day period
after the initial delivery of the depositary shares.
Investing in
the depositary shares involves risks. See Risk Factors beginning on page S-9.
Neither the Securities and Exchange Commission (SEC) nor any state securities commission has approved or disapproved of the
depositary shares or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
|
|
|
|
|
|
|
|
|
|
|
Per Depositary Share
|
|
|
Total
|
|
Public offering price (1)
|
|
$
|
|
|
|
$
|
|
|
Underwriting discount(2)
|
|
$
|
|
|
|
$
|
|
|
Proceeds, before expenses(3)
|
|
$
|
|
|
|
$
|
|
|
(1)
|
The public offering price does not include dividends, if any, that may be declared. Dividends, if declared,
will accrue from the date of initial issuance, which is expected to be , 2021.
|
(2)
|
Reflects depositary shares sold to institutional investors, for which the underwriters received an
underwriting discount of $ per share, and depositary shares sold to retail investors, for which the underwriters received an underwriting discount of $ per share.
|
(3)
|
Assumes no exercise of the underwriters over-allotment option described below.
|
We have granted the underwriters the right to purchase up to an
additional depositary shares at the public offering price, less the underwriting discount, exercisable for a period of three days from the date of this
prospectus supplement to cover over-allotments, if any.
The underwriters expect to deliver the depositary shares to purchasers in
book-entry form through the facilities of The Depository Trust Company (DTC) and its direct participants, including Euroclear Bank S.A./N.V., as operator of the Euroclear System (Euroclear) and Clearstream Banking,
société anonyme (Clearstream) on or about , 2021.
Joint
Book-Running Managers
|
|
|
|
|
|
|
|
|
BofA Securities
|
|
Credit Suisse
|
|
J.P. Morgan
|
|
Morgan Stanley
|
|
Wells Fargo Securities
|
Senior Co-Managers
|
|
|
Citigroup
|
|
Goldman Sachs & Co. LLC
|
, 2021