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Get filing alertsBread Financial raises capital with preferred stock offering, restricts common dividends
Filed May 12, 2026 · Period ending May 12, 2026 · ~1 min read
Key Changes
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high
Issued 5.4 million depositary shares representing 8.875% Series B Preferred Stock with $1,000 liquidation preference per share, raising $0.01 through underwriters led by Morgan Stanley.
Item 3.03, 5.03 verify on EDGAR → -
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New preferred stock restricts company's ability to pay common stock dividends or repurchase shares if preferred dividends are missed, creating payment hierarchy that prioritizes preferred shareholders.
Item 3.03 verify on EDGAR → -
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Series B Preferred is perpetual with no maturity date and non-cumulative, meaning unpaid dividends don't accumulate. The 8.875% rate will reset at a future date per the certificate terms.
Item 3.03 verify on EDGAR → -
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Certificate of Designations filed with Delaware on May 11, 2026, effective May 12, 2026, formally amending the company's certificate of incorporation to create the new preferred class.
Item 5.03 verify on EDGAR → -
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Underwriters exercised 600,000 share overallotment option. Computershare will serve as depositary for the preferred stock receipts.
Item 3.03 verify on EDGAR →
Summary
Bread Financial completed a preferred stock offering on May 12, 2026, raising $0.01 by issuing 5.4 million depositary shares of new 8.875% Series B Preferred Stock. Each depositary share represents a 1/40th interest in a preferred share with a $1,000 liquidation preference.
The offering was underwritten by a syndicate led by Morgan Stanley, RBC Capital Markets, UBS Securities, Wells Fargo Securities, and Keefe Bruyette & Woods. Common shareholders should understand this changes the capital structure hierarchy.
The new preferred stock ranks senior to common stock and includes protective provisions: if Bread Financial misses a preferred dividend payment, it cannot pay common dividends or repurchase common shares until preferred dividends resume. The preferred stock is perpetual with no maturity date and non-cumulative, so missed dividends don't pile up as debt. Watch the company's quarterly dividend declarations on the preferred stock. Consistent payments signal financial health, while any suspension would immediately restrict capital returns to common shareholders and could indicate stress in the business.
Section-by-Section Diff
Event · Item 3.03 — Material Modification to Rights of Security Holders
Item 3.03 — Material Modification to Rights of Security Holders filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
On May 12, 2026, the Company issued and sold 5,400,000 depositary shares (the “Depositary Shares”), each representing a 1/40th interest in a share of the Series B Preferred Stock, including 600,000 Depositary Shares purchased pursuant to the option to purchase additional Depositary Shares granted by the Company in the underwriting agreement (the “Underwriting Agreement”), dated May 5, 2026, between the Company and Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC and Keefe, Bruyette & Woods, Inc., as representatives (in such capacity, the “Representatives”) of the underwriters named therein.
Bread Financial completed a preferred stock offering, issuing 5.4 million depositary shares representing fractional interests in its new 8.875% Series B Preferred Stock with $1,000 liquidation preference per share. The offering included an overallotment of 600,000 shares and was underwritten by major investment banks. This capital raise adds a new class of senior securities to the company's capital structure.
Added in current filing · verify on EDGAR →
Under the terms of the Series B Preferred Stock, the ability of the Company to declare, pay or set aside any payment for dividend or distribution on any shares of stock ranking junior to the Series B Preferred Stock, or repurchase, redeem or otherwise acquire for consideration, directly or indirectly, any shares of stock ranking on parity with or junior to the Series B Preferred Stock, is subject to restrictions in the event that the Company does not declare and either pay or set aside a sum sufficient for payment of dividends on the Series B Preferred Stock for the immediately preceding dividend period.
The new preferred stock includes protective provisions that restrict the company's ability to pay dividends on common stock or repurchase shares if it fails to pay the preferred dividends. This creates a payment hierarchy that prioritizes preferred shareholders and could limit capital returns to common shareholders if the company experiences financial stress.
Event · Item 5.03 — Amendments to Articles of Incorporation or Bylaws
Item 5.03 — Amendments to Articles of Incorporation or Bylaws filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
The Certificate of Designations became effective May 12, 2026 after filing with the Secretary of State of the State of Delaware on May 11, 2026 and it amends the Company’s Third Amended and Restated Certificate of Incorporation.
Bread Financial Holdings filed a Certificate of Designations with Delaware on May 11, 2026, effective May 12, 2026, which formally amends the company's certificate of incorporation to create a new class of Series B Preferred Stock. This represents a change to the company's capital structure, establishing rights, preferences, and terms for this new preferred equity class.
Event · Item 8.01 — Other Events
Company entered underwriting agreement to issue up to 5.52M depositary shares with 720K overallotment option.
Added in current filing · verify on EDGAR →
On May 5, 2026, the Company entered into the Underwriting Agreement with the Representatives, pursuant to which the Company agreed to issue and sell an aggregate of up to 5,520,000 Depositary Shares, including up to an additional 720,000 Depositary Shares pursuant to the option granted by the Company to the Underwriters therein, subject to the conditions set forth in the Underwriting Agreement.
Bread Financial entered an underwriting agreement to sell up to 5.52 million depositary shares. The underwriters have an option to purchase an additional 720,000 shares (a standard overallotment or greenshoe provision). This represents a capital raise that will dilute existing shareholders but provides the company with additional funding.
Event · Item 9.01 — Financial Statements and Exhibits
Bread Financial issued 8.875% Series B perpetual preferred stock via underwritten offering with Morgan Stanley and others.
Added in current filing · verify on EDGAR →
Certificate of Designations of 8.875% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B, par value $0.01 per share, of the Company, dated May 12, 2026.
Bread Financial created a new class of preferred stock — Series B perpetual preferred with an 8.875% fixed rate that resets over time. This is non-cumulative, meaning missed dividends do not accumulate. The company filed the certificate of designations establishing the terms of this security on May 12, 2026.
Added in current filing · verify on EDGAR →
Underwriting Agreement, dated May 5, 2026, among the Company, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC and Keefe, Bruyette & Woods, Inc., as representatives of the underwriters listed in Schedule 1 thereto.
The company entered into an underwriting agreement with a syndicate led by Morgan Stanley, RBC Capital Markets, UBS Securities, Wells Fargo Securities, and Keefe Bruyette & Woods to sell the new preferred stock. This indicates a capital raise through a public offering, with major investment banks managing the distribution.
Added in current filing · verify on EDGAR →
Deposit Agreement, dated May 12, 2026, among the Company, Computershare Inc. and Computershare Trust Company, N.A. jointly as depositary, and the holders from time to time of the depositary receipts described therein.
The preferred stock will be represented by depositary receipts managed by Computershare. This is a standard administrative structure for preferred securities, allowing easier trading and record-keeping. Investors will hold depositary receipts rather than direct shares of the preferred stock.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jun 1, 2026 · How we verify