Prudential Financial in $1.5 Billion Contingent Capital Facility

November 25, 2013

Cleary Gottlieb represented the initial purchasers, led by Credit Suisse Securities (USA) as sole structuring advisor, in an offering of $1.5 billion of Pre-Capitalized Trust Securities Redeemable November 15, 2023 issued by the Five Corners Funding Trust on November 25, 2013. The Trust invested the proceeds of the sale of the P-Caps in a portfolio of U.S. Treasury strips and entered into a put option agreement with Prudential Financial, Inc. under which PFI may issue up to $1.5 billion of its unsecured 4.419% Senior Notes due November 25, 2023 from time to time to the Trust in exchange for an equal amount of Treasuries. PFI is required to exercise the put option in full upon certain automatic or mandatory triggers, including events of bankruptcy, certain payment defaults, or if Prudential reasonably believes that its consolidated net worth has fallen below $7 billion. This novel structure was designed to give PFI a source of liquid assets and allow PFI to maintain competitive capital levels after a stress event has occurred, while providing P-Caps investors a risk profile equivalent to a direct investment in PFI senior debt. The P-Caps were offered under Rule 144A under the Securities Act and Section 3(c)(7) of the Investment Company Act and are currently rated the same as PFI senior debt by S&P and Moody’s.

Prudential Financial offers a wide array of financial products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management.