Business Context and Reporting Period
This Form 8-K is filed by Colony NorthStar, Inc. (not Digitalbridge Group, Inc.) with a report date of September 18, 2017. The filing details the classification of new preferred stock and the partial redemption of existing preferred stock.
Key Financial Metrics and Capital Structure
- New Issuance: The Company classified 12,650,000 shares of 7.125% Series J Cumulative Redeemable Perpetual Preferred Stock.
- Liquidation Preference: $25.00 per share for Series J.
- Dividend Rate: 7.125% per annum ($1.78125 per share), payable quarterly.
- Additional Proceeds: Underwriters exercised an option to purchase an additional 1,600,000 shares of Series J Preferred Stock, generating estimated net proceeds of approximately $38.7 million.
- Redemption: The Company intends to redeem 1,549,600 shares of its 8.25% Series B Cumulative Redeemable Perpetual Preferred Stock at $25.00 per share plus accrued dividends.
Material Changes and Transactions
- Series J Issuance: Articles Supplementary became effective on September 22, 2017. The stock is perpetual unless redeemed on or after September 22, 2022, or upon a Change of Control.
- Series B Redemption: Using proceeds from the Series J offering, the Company notified holders of the Series B Preferred Stock of a partial redemption scheduled for October 18, 2017.
- Capital Structure Shift: The transaction replaces higher-cost debt (8.25% Series B) with lower-cost debt (7.125% Series J), reducing future dividend obligations.
Outlook, Risks, and Unusual Items
- Redemption Contingency: The redemption of Series B shares was contingent upon the closing of the Series J offering.
- Change of Control Provisions: Series J holders have conversion rights into Class A common stock upon a Change of Control, subject to a share cap of 3.7908 shares of common stock per preferred share.
- Dividend Cessation: Dividends on the redeemed Series B shares will cease to accrue on the redemption date.
- Financial Statements: This filing does not contain revenue, profit, or cash flow statements; it focuses solely on capital structure changes.
Investor Verification Checklist
- Verify the closing of the Series J Preferred Stock offering and the receipt of the estimated $38.7 million in net proceeds.
- Confirm the execution of the Series B Preferred Stock redemption on October 18, 2017.
- Review the impact of the reduced dividend rate (from 8.25% to 7.125%) on future cash flow requirements.
- Check for any subsequent filings regarding the full redemption of the remaining Series B Preferred Stock.