State Street Announces Issuance of $1 Billion of Senior Debt

Rhea-AI Summary

State Street (NYSE: STT) has announced the issuance of $1 billion in senior debt, with a focus on inclusion and diversity in the financial services industry. The offering involved five broker-dealers owned by underrepresented groups, collectively underwriting 40% of the securities. This marks State Street's fourteenth consecutive offering structured to align with its inclusion, diversity, and equity strategy.

The underwriting syndicate included R. Seelaus & Co., as a joint book-running manager, along with CastleOak Securities, L.P., Drexel Hamilton, , Independence Point Securities , and Samuel A. Ramirez & Company, Inc. as co-managers. HSBC Securities (USA) Inc., BofA Securities, Inc., and Deutsche Bank Securities Inc. also acted as joint book-running managers.

Positive

• Issuance of $1 billion in senior debt, strengthening State Street's financial position
• 40% of securities underwritten by broker-dealers owned by underrepresented groups, promoting diversity in financial services
• Fourteenth consecutive offering aligned with inclusion, diversity, and equity strategy, demonstrating consistent commitment

Negative

• None.

Insights

Financial Analyst

State Street's $1 billion senior debt issuance is a significant move that strengthens the company's capital position. This transaction demonstrates State Street's ability to access capital markets effectively, which is important for financial institutions. The issuance likely improves the firm's liquidity ratio and provides additional funds for potential investments or operational needs.

What's particularly noteworthy is the structure of the underwriting syndicate. By including diverse-owned firms for 40% of the underwriting, State Street is not only fulfilling its DEI commitments but also potentially broadening its investor base. This approach could lead to improved market perception and potentially lower borrowing costs in the future. However, investors should monitor how this debt impacts State Street's leverage ratios and interest expenses in upcoming financial reports.

Diversity and Inclusion Expert

State Street's debt issuance represents a significant step towards financial inclusion in the investment banking sector. By allocating 40% of the underwriting to firms owned by underrepresented groups, State Street is creating tangible opportunities for these businesses to gain experience and build their track records in high-profile transactions.

This move goes beyond mere tokenism, as it involves substantial responsibilities and potential revenues for these firms. It sets a precedent that could encourage other major financial institutions to follow suit, potentially leading to a more diverse and equitable financial services landscape. However, the real impact will depend on whether this becomes a consistent practice across the industry and leads to long-term growth for these diverse-owned firms.

Corporate Governance Specialist

This debt issuance aligns with State Street's ESG (Environmental, Social and Governance) strategy, particularly emphasizing the 'S' component. By consistently incorporating diverse firms in their financial transactions, State Street is demonstrating a commitment to sustainable business practices that extend beyond mere policy statements.

From a governance perspective, this approach may enhance State Street's reputation among socially conscious investors and potentially improve its ESG ratings. However, it's important to note that while this is a positive step, investors should also scrutinize other aspects of State Street's governance, such as board diversity, executive compensation and overall corporate strategy, to get a comprehensive picture of the company's commitment to good governance practices.

• This offering reinforces State Street’s commitment to inclusion and diversity in the financial services industry

BOSTON--(BUSINESS WIRE)-- State Street Corporation (“State Street”) (NYSE: STT) announced today an issuance of $1 billion in aggregate principal amount of senior debt. The offering, which closed today, was structured in keeping with State Street’s ongoing inclusion, diversity, and equity efforts, with R. Seelaus & Co., LLC acting as a joint book-running manager, and CastleOak Securities, L.P., Drexel Hamilton, LLC, Independence Point Securities LLC, and Samuel A. Ramirez & Company, Inc. each acting as co-managers. All five broker-dealers are owned by underrepresented groups and, collectively, have underwritten 40% of the securities in the issuance. The underwriting syndicate also included HSBC Securities (USA) Inc., BofA Securities, Inc. and Deutsche Bank Securities Inc. each acting as joint book-running managers.

“The debt issuance we are announcing today, with a diverse set of firms, underscores the importance we see in broadening our financial partnerships,” said Pankaj Vaish, global chief investment officer at State Street Corporation. “We are proud to announce this latest transaction as these issuances help to advance State Street’s financial and inclusion goals, broaden industry representation and reaffirm our focus on achieving better results for investors and the communities they serve.”

This marks State Street’s fourteenth consecutive offering engagement where the underwriting syndicate has been structured in a manner consistent with State Street’s inclusion, diversity, and equity strategy, reflecting the firm’s ongoing efforts to amplify its sustainability and impact initiatives.

“State Street has always shown a commitment to DEI initiatives in the financial services industry, and this latest $1 billion debt issuance with a syndicate representing several diverse- and women-owned firms is no exception,” said Annie Seelaus, chief executive officer at R. Seelaus & Co., LLC. “At Seelaus we are grateful for our long-standing collaboration with State Street and their willingness to be a thought leader in elevating under-represented groups. We are proud to have served as a Joint Book-Running Manager on the transaction and played a role in a more equitable marketplace.”

About State Street Corporation

State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $44.3 trillion in assets under custody and/or administration and $4.4 trillion* in assets under management as of June 30, 2024, State Street operates globally in more than 100 geographic markets and employs approximately 53,000 worldwide. For more information, visit State Street's website at www.statestreet.com.

*Assets under management as of June 30, 2024 includes approximately $69 billion of assets with respect to SPDR^® products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated.

© 2024 State Street Corporation

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View source version on businesswire.com: https://www.businesswire.com/news/home/20240820044642/en/

Brendan Paul

Mobile: +1 401 644 9182

Bpaul2@statestreet.com

Source: State Street Corporation

FAQ

What is the value of State Street's (STT) recent senior debt issuance?

State Street (NYSE: STT) recently issued $1 billion in aggregate principal amount of senior debt.

How does State Street's (STT) debt issuance support diversity in financial services?

The debt issuance involved five broker-dealers owned by underrepresented groups, collectively underwriting 40% of the securities, supporting diversity in the financial services industry.

Which diverse-owned firms participated in State Street's (STT) recent debt offering?

R. Seelaus & Co., , CastleOak Securities, L.P., Drexel Hamilton, , Independence Point Securities , and Samuel A. Ramirez & Company, Inc. participated as diverse-owned firms in the debt offering.

How many consecutive offerings has State Street (STT) structured to support diversity?

This marks State Street's fourteenth consecutive offering structured in a manner consistent with its inclusion, diversity, and equity strategy.