Invesco preferred shares with $1.5 billion in liquidation preference have been repurchased from MassMutual, with the transaction closing on October 26, 2026. Invesco borrowed $1.5 billion under a new five-year term loan to finance the purchase.

Key Takeaways

  • Invesco paid a 12.5% premium on the shares’ $1,000-per-share liquidation preference.
  • MassMutual retains preferred stock with $1 billion in aggregate liquidation preference.
  • The unsecured term loan was drawn in full and matures on October 26, 2031.

Invesco preferred shares retired

The completed transaction covers part of Invesco’s 5.9% Fixed Rate Non-Cumulative Perpetual Series A Preference Shares. It was carried out under a repurchase agreement dated October 23, 2026.

MassMutual also holds approximately 18.5% of Invesco’s outstanding common shares. The repurchase reduces its preferred holding but does not eliminate it.

Five-year loan finances the purchase

Invesco and its indirect subsidiary Invesco Finance entered into the unsecured credit agreement with a lender syndicate that includes Bank of America as administrative agent. Invesco guarantees the loan.

Interest is based on Term SOFR or a base rate, plus a margin tied to credit ratings. Based on current ratings, the margin would be 1.350% for SOFR-based borrowing or 0.350% for base-rate borrowing.

Quarterly amortization payments of 2.5% begin on the third anniversary of closing, with the remaining balance due at maturity. The borrower may seek to increase the facility to as much as $2 billion under certain conditions, but lenders are not obliged to provide additional commitments.

Loan covenants and shareholder agreement

The loan requires Invesco to maintain a quarterly debt-to-EBITDA ratio of no more than 3.25 to 1 and interest coverage of at least 4 to 1. The leverage limit can temporarily rise to 3.75 to 1 for up to four fiscal quarters following certain acquisitions exceeding $500 million in consideration.

Invesco and MassMutual also amended their 2019 shareholder agreement. For one ownership test, the amendment lowers the required aggregate liquidation preference of preferred shares held by MassMutual to $1 billion from $2 billion.

Read More News

More FinanceVelix news

Disclaimer

This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.