Pricing Agreement
Exhibit 1.2
Execution Version
Pricing Agreement
Date: June 13, 2006
Ladies and Gentlemen:
KeyCorp Capital VIII, a statutory trust formed under the laws of the State of Delaware (the “Designated Trust”), and KeyCorp, an Ohio corporation (the “Company”), propose, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated June 13, 2006 (the “Underwriting Agreement”), among the Designated Trust and the Company, on the one hand, and UBS Securities LLC, as Representative of the several underwriters named in Schedule I hereto (the “Underwriters”), on the other hand, to issue and sell to the Underwriters the Securities specified in Schedule II hereto (the “Designated Securities”, consisting of Firm Designated Securities and any Optional Designated Securities the Underwriters may elect to purchase). The principal asset of the Designated Trust consists of debt securities of the Company (the “Junior Subordinated Debentures”), as specified in Schedule II to this Agreement. The Designated Securities will be guaranteed by the Company to the extent set forth in this Agreement with respect to such Designated Securities (the “Guarantee”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the Applicable Time set forth in this Pricing Agreement, except that each representation and warranty which refers to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty (i) as of the date of the Underwriting Agreement, (ii) as of the Applicable Time set forth in this Pricing Agreement and (iii) as of the Time of Delivery set forth in this Pricing Agreement. Each reference to the Representative herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representative designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Designated Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representative referred to in such Section 12 are set forth in Schedule II hereto.
An amendment to the Initial Registration Statement or a supplement to the Prospectus, as the case may be, relating to the Designated Securities, and the Issuer Free Writing Prospectus identified on Schedule III hereto, including the documents incorporated therein by reference, in the form heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Designated Trust agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Designated Trust, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the number of Firm Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and return to us seven counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Designated Trust and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Designated Trust and the Company for examination, upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof.
| Very truly yours, | ||
| KEYCORP | ||
| By: | /s/ Jonathan I. Shulman | |
| Name: | Jonathan I. Shulman | |
| Title: | Senior Vice President | |
| KEYCORP CAPITAL VIII | ||
| By: | KeyCorp, as Depositor | |
| By: | /s/ Jonathan I. Shulman | |
| Name: | Jonathan I. Shulman | |
| Title: | Senior Vice President | |
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Accepted as of the date hereof:
As Representative of the Underwriters
named in Schedule I hereto
| UBS SECURITIES LLC | ||
| By: | /s/ Michael Ravanesi | |
| Name: | Michael Ravanesi | |
| Title: | Director | |
| By: | /s/ Khalid Azim | |
| Name: | Khalid Azim | |
| Title: | Executive Director | |
SCHEDULE I
| Underwriter | Number of Firm Designated Securities to be Purchased | |
| UBS Securities LLC | 1,430,000 | |
| KeyBanc Capital Markets, a division of McDonald Investments Inc. | 1,430,000 | |
| Citigroup Global Markets Inc. | 1,400,000 | |
| Merrill Lynch, Pierce, Fenner & Smith Incorporated | 1,400,000 | |
| Morgan Stanley & Co. Incorporated | 1,400,000 | |
| Wachovia Capital Markets, LLC | 1,400,000 | |
| Credit Suisse Securities (USA) LLC | 170,000 | |
| Deutsche Bank Securities Inc. | 170,000 | |
| Goldman, Sachs & Co. | 170,000 | |
| RBC Dain Rauscher Inc. | 170,000 | |
| Banc of America Securities LLC | 85,000 | |
| Bear, Stearns & Co. Inc. | 85,000 | |
| Charles Schwab & Co., Inc. | 85,000 | |
| HSBC Securities (USA) Inc. | 85,000 | |
| J.P. Morgan Securities Inc. | 85,000 | |
| Piper Jaffray & Co. | 85,000 | |
| Barclays Capital Inc. | 50,000 | |
| D.A. Davidson & Co. | 50,000 | |
| Keefe, Bruyette & Woods, Inc. | 50,000 | |
| Sandler, O’Neill & Partners, L.P. | 50,000 | |
| SBK-Brooks Investment Corp. | 50,000 | |
| Stifel, Nicolaus & Company, Incorporated | 50,000 | |
| The Williams Capital Group, L.P. | 50,000 | |
| Total | ||
SCHEDULE II
Designated Trust:
KeyCorp Capital VIII
Title of Designated Securities:
7% Enhanced Trust Preferred Securities
Aggregate principal amount:
Aggregate Principal Amount of Designated
Securities to be sold: $250,000,000
Price to Public:
100% of the principal amount of the Designated Securities
Purchase Price by Underwriters:
100% of the principal amount of the Designated Securities
Underwriters’ Commission:
$0.7875 per trust preferred security and $7,875,000 in the aggregate, except that the underwriting commission will be $0.50 per trust preferred security with respect to any trust preferred securities sold to institutions. To the extent of those sales, the total underwriting commission will decrease and the net proceeds to the Issuer will increase
Specified Funds for Payment of Purchase Price:
Federal (same day) Funds
Accountants’ Letter to be Delivered on Date of Pricing Agreement:
Yes.
Trust Agreement:
Trust Agreement dated as of April 5, 2005, between the Company and the Trustees named therein, as amended from time to time
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Indenture:
Junior Subordinated Indenture, dated as of December 4, 1996, between the Company and Bankers Trust Company (now known as Deutsche Bank Trust Company Americas), as Indenture Trustee, as supplemented from time to time (the “Indenture”)
Maturity:
Upon the earlier of the stated maturity of the junior subordinated debentures or the earlier redemption of the junior subordinated debentures
Interest Rate:
7% per annum.
Interest Payment Dates:
March 15, June 15, September 15 and December 15
Extension Period:
20 quarters (subject to extension pursuant to the alternative payment mechanism)
Applicable Time:
4:30 p.m., New York City time on June 13, 2006, on the date of this Pricing Agreement.
Time of Delivery:
10:00 a.m., New York City time, on June 20, 2006
Closing Location:
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Name of Representative:
UBS Securities LLC
299 Park Avenue
New York, New York 10171
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SCHEDULE III
Issuer Free Writing Prospectus
1. The Final Term Sheet dated June 13, 2006
