State Street Corp to redeem $800 million in senior notes

State Street Corporation (NYSE:STT), the Boston-based financial services company with a market capitalization of $28 billion and a P/E ratio of 14.96, announced today that it will redeem two series of senior notes totaling $800 million.

The redemption includes the $500 million 4.857% Fixed-to-Floating Rate Senior Notes due 2026 and the $300 million 1.746% Fixed-to-Floating Rate Senior Notes also due 2026. According to InvestingPro analysis, the company appears slightly undervalued at its current price of $95.42.

The redemption of the $500 million notes, referred to as the January Notes, will occur on January 27, 2025. Holders of these notes will receive 100% of the principal amount plus accrued and unpaid interest up until, but not including, the redemption date. Similarly, the $300 million notes, known as the February Notes, will be redeemed on February 6, 2025, with the same payment terms.

State Street has specified that it will cease interest accrual on both the January and February Notes after their respective redemption dates. The company plans to use cash on hand to fund the aggregate redemption price for both sets of notes.

This financial move is disclosed in accordance with Regulation FD of the Securities Exchange Act of 1934. The information provided in the report is not considered "filed" for purposes of Section 18 of the Exchange Act and is not to be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, unless specifically noted in such filings.

InvestingPro data reveals that State Street has maintained dividend payments for 54 consecutive years, with a current attractive yield of 3.19%.

The redemption announcement reflects State Street's financial management strategies and is based on a press release statement filed with the SEC. The company's securities, including common stock and depositary shares representing interest in preferred stock, are listed on the New York Stock Exchange under the symbols STT and STT.PRG, respectively.

Notably, the stock has shown strong momentum with a 34% price return over the past six months. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, State Street Corporation has made significant strides in its financial operations. The company's Q3 earnings per share (EPS) of $2.26 surpassed expectations, driving a 7% growth in fee revenues and a 9% increase in total revenues.

However, JPMorgan maintained an Underweight rating due to pricing pressures and slower revenue growth. Meanwhile, Keefe, Bruyette & Woods raised its price target following the robust earnings report.

State Street has also successfully closed a $2.25 billion senior debt issuance, underwritten in part by five minority-owned broker-dealers, demonstrating the company's commitment to diversity and inclusion. These recent developments include the appointment of Patricia Halliday to State Street's Board of Directors, bringing her thirty years of experience in the financial sector to the table.

Despite these positive advancements, a study by zeb Consulting predicts a continued decrease in profitability for asset managers, including State Street, through 2028. This is partly due to investor preferences shifting towards lower-fee products like ETFs. Looking ahead, State Street aims for total fee revenue growth of 4% to 5% and net interest income growth of 4% to 5%.

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