No recourse will be available for the payment of principal of, or interest on, any Note, for any claim based thereon, or otherwise in respect thereof, against any stockholder, employee, officer, or director of First Citizens BancShares, Inc. or any successor entity. Neither the Indenture nor the Notes contain any covenants or restrictions restricting the incurrence of debt, deposits, or other liabilities by us or by our subsidiaries. The Indenture and the Notes contain no financial covenants and do not restrict us from paying dividends, selling assets, making investments, or issuing or repurchasing other securities, and do not contain any provision that would provide protection to the holders of the Notes against a sudden and dramatic decline in credit quality resulting from a merger, takeover, recapitalization, or similar restructuring or any other event involving us or our subsidiaries that may adversely affect our credit quality.
We do not intend to apply for the listing of the Notes on any securities exchange or the quotation of the Notes on any quotation system.
Interest
From and including the date of original issuance, to but excluding March 15, 2025, or the date of earlier redemption (the fixed rate period), the Notes will bear interest at an initial rate of 3.375% per annum, payable semi-annually in arrears on March 15 and September 15 of each year (each, a fixed rate interest payment date), commencing on September 15, 2020. The last fixed rate interest payment date for the fixed rate period will be March 15, 2025.
From and including March 15, 2025, to but excluding the Maturity Date or the date of earlier redemption (the floating rate period), the Notes will bear interest at a floating rate per annum equal to the Benchmark rate (which is expected to be Three-Month Term SOFR) plus 246.5 basis points for each quarterly interest period during the floating rate period, payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year (each, a floating rate interest payment date, and, together with the fixed rate interest payment dates, the interest payment dates), commencing on June 15, 2025. Notwithstanding the foregoing, if the Benchmark rate is less than zero, the Benchmark rate shall be deemed to be zero.
For the purpose of calculating the interest on the Notes for each interest period during the floating rate period when the Benchmark is Three-Month Term SOFR, Three-Month Term SOFR means Term SOFR for a tenor of three months that is published by the Term SOFR Administrator at the Reference Time for any floating rate interest period, as determined by the calculation agent after giving effect to the Three-Month Term SOFR Conventions. See Calculation Agent.
The following definitions apply to the foregoing definition of Three-Month Term SOFR:
Benchmark means, initially, Three-Month Term SOFR; provided that, if the calculation agent determines on or prior to the Reference Time for any floating rate interest period that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Three-Month Term SOFR or the then-current Benchmark, then Benchmark means the applicable Benchmark Replacement for such floating rate interest period and any subsequent floating rate interest periods.
Corresponding Tenor means (i) with respect to Term SOFR, three months, and (ii) with respect to a Benchmark Replacement, a tenor (including overnight) having approximately the same length (disregarding business day adjustment) as the applicable tenor for the then-current Benchmark.
Federal Reserve Bank of New Yorks Website means the website of the Federal Reserve Bank of New York (the FRBNY) at http://www.newyorkfed.org, or any successor source. The foregoing Internet website is an inactive textual reference only, meaning that the information contained on the website is not part of this prospectus supplement or the accompanying prospectus or incorporated by reference herein or therein.
Reference Time with respect to any determination of the Benchmark means (i) if the Benchmark is Three-Month Term SOFR, the time determined by the calculation agent after giving effect to the Three-Month Term SOFR Conventions, and (ii) if the Benchmark is not Three-Month Term SOFR, the time determined by the calculation agent after giving effect to the Benchmark Replacement Conforming Changes.
Relevant Governmental Body means the Federal Reserve and/or the FRBNY, or a committee officially endorsed or convened by the Federal Reserve and/or the FRBNY or any successor thereto.
SOFR means the secured overnight financing rate published by the FRBNY, as the administrator of the Benchmark (or any successor administrator), on the Federal Reserve Bank of New Yorks website.