KeyCorp Announces $625 Million Common Stock Offering; Plan to Repay TARP

KeyCorp KEY announced today it has commenced an underwritten public offering of $625 million of its common stock in connection with its plan to repurchase the $2.5 billion of the Series B Fixed-Rate Cumulative Perpetual Preferred Stock it issued to the U.S. Treasury under the TARP Capital Purchase Program. Key is proceeding with these capital actions pursuant to its capital plan (the "Plan") submitted to the Federal Reserve on January 7, 2011. Today, the Federal Reserve informed Key that it had no objections to the capital actions set forth in the Plan.

Key also intends to promptly commence a separate registered public offering of senior notes. Proceeds from both offerings, together with other available funds, will be used to repurchase such preferred stock upon receiving the U.S. Treasury's authorization.

Key's Plan, which was approved prior to submission by Key's Board of Directors, requested authority to increase its quarterly common stock dividend from $0.01 per share to $0.03 per share effective in the second quarter of 2011. The Federal Reserve did not object to that request and Key's Board will consider the dividend increase at its regular May meeting. Future increases will be evaluated by the Board of Directors, based on our earnings, financial condition, capital requirements, and other factors.