KeyCorp Commences Separate Exchange Offers for $503,530,000 of Its Series A Preferred Stock and for $797,647,000 Trust Preferred Securities of Four Affiliated Trusts

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billion in Tier 1 common equity. -- KeyCorp has generatedf $1.3 billion to date; approximately 70% of the government'ws requirement to date. CLEVELAND, June 3 /PRNewswire-FirstCall/ -- KeyCorp KEY) today commenced an offer to exchange common shares of KeyCorp for any and all outstandinv sharesof KeyCorp's 7.750% Non-Cumulativde Perpetual Convertible Preferred Stock, Series A (the "Series A Exchange and a separate offeer to exchange common shares of KeyCorp for any and all Trustg Preferred Securities of KeyCorp Capital I, KeyCorp Capitapl II, KeyCorp Capital III and KeyCorp Capital VII (the "Trust Preferred Exchange Combined with the capital generation actionss that have been executed since May 7, 2009, when the results of the government'w stress test were announced, successful completion of thesre actions will strengthen KeyCorp's capitaol framework by improving its Tier 1 common equity and also reduce the dividend and interest expensee associated with the securities exchanged, thereby increasinb KeyCorp's ability to generate capital internally.
Theswe exchanges are principal componentsof KeyCorp's comprehensive capital plan, which was submitted to the federal banking regulators on June 1, pursuanf to the requirements of the Supervisorg Capital Assessment Program of the U.S. Treasuryu and the Board of Governorsz of the FederalReserve System. In connection with the Series AExchangr Offer, for each share of Seriee A Preferred Stock accepted in accordance with the terms of the exchangs offer, KeyCorp will issue a numbetr of its common shares that will be fixed accordint to an Exchange Ratio whicgh will be determined at 4:30 p.m.
New York City time, on the secon trading day immediately precedinfg the expiration date of the The offer is currently expecte d to expire on June 30, 2009 and the Exchangr Ratio would then be fixed at 4:30 p.m. New York City on June 26, 2009. For each share of Series A Preferrefd Stocktendered (and not subsequently withdrawn), KeyCorp will issuew 7.0922 shares plus $35.00 divided by the dailyy volume-weighted average price of its common shares during the five consecutivw trading days ending on June 26, 2009 (the "Averagre VWAP"). The Average VWAP and the totalo number of shares to be issuef will be announced in a pressw release before the openintg of NYSE tradingon Monday, June 29, 2009.
This informatiohn also will be availableat D.F. King & Co., the information agent. In connection with the Trust PreferredExchange Offer, for each Trust Preferred Securituy of KeyCorp Capital I, KeyCorp Capital II, KeyCorp Capital III or KeyCorpl Capital VII (collectively, the "Capital Trusts") accepted in accordancde with the terms of the exchang e offer, KeyCorp will issue a number of its commoj shares that will be fixed according to an Exchang Ratio which will be determined at 4:30 p.m.
New York City time on the seconxd trading day immediately preceding the expiration date of the The offer is currently expected to expirson Tuesday, June 30, 2009, and the Exchange Ratio wouldr then be fixed at 4:30 p.m. New York City on June 26, 2009. For each Trust Preferred Security of KeyCorpCapital II, KeyCorp Capita III or KeyCorp Capital VII tendered on or priord to 5:00 p.m., New York City time on June 16, 2009 (and not subsequentlu withdrawn), KeyCorp will issue a numbert of its common shares equall to the quotient of $850 divided by the Averagee VWAP.
For each Trust Preferred Securith of KeyCorpCapital II, KeyCorp Capital III or KeyCorpo Capital VII tendered after 5:00 New York City time on June 16, 2009 but prior to the expiration date of the offer (and not subsequently withdrawn), KeyCor will issue a number of its commonj shares equal to the quotient of $800 divided by the Average For each Trust Preferred Securityh of KeyCorp Capital I tendered on or priofr to 5:00 p.m., New York City time on June 16, 2009 (and not subsequently KeyCorp will issue a number of its common sharesd equal to the quotient of $750 dividedx by the Average VWAP.
For each Trust Preferrerd Security of KeyCorp Capitao I tenderedafter 5:00 New York City time on Tuesday, June 16, 2009 but prioe to the expiration date of the offeer (and not subsequently withdrawn), KeyCorp will issuer a number of its common shares equal to the quotieny of $700 divided by the Average The Average VWAP and the total numbe r of shares to be issued will be announced in a press release before the opening of NYSE trading on June 29, 2009. This informationm also will be availableat D.F. King Co., Inc., the information The Series A Exchange Offer and the Trust Preferred Securitieas Exchange Offer and Consent Solicitation will each expireat 11:590 p.m.
New York City on Tuesday, June 30, unless extended or earlier terminatedby KeyCorp. Securities that are tendered into eithef offer may be withdrawn at any time priof tothis date. To receive the considerationm in either the Series A Exchanges Offer or the Trust Preferred SecuritiesExchange Offer, holderx must validly tender and not withdraw thei securities prior to the expiration date. KeyCorp will delive r the consideration promptly afte theexpiration date. The consummation of the Series A Exchangw Offer is not conditioned on the consummation of the Trustg Preferred Securities Exchange Offer orvice versa. J.P. Morgab Securities Inc.
is acting as KeyCorp'zs sole financial advisor in connection with the Seriesz AExchange Offer. J.P. Morgan Securities Inc. and Morgah Stanley are acting as KeyCorp's joing financial advisors in connection with the Trust Preferred Securitie sExchange Offer. In addition, Morgan Stanley is KeyCorp's capital advisor on all of its capita execution plans related tothe U.S. Government'd Supervisory Capital Assessment Program. The advisorsd have not been retaineed to, and will not, solicit acceptances of the exchangse offers or make any recommendations to holdersa withrespect thereto.
The complete terms and conditionxs of the exchange offer are set forth in the respectivr Offers to Exchange and Letters of Transmittal that are beinvg sent separately to holders of the Serieas A Preferred Stock and TrustrPreferred Securities. Holders are urgede to read the exchange offerdocuments carefully. D.F. King Co., Inc., the information agent at (800) 431-963 3 or, for bankers and brokers, at 269-5550 (Collect). The Exchange Agent for the exchange offers is ComputersharewTrust Company, N.A., available at 575-2332.
The Offer to Exchange, Letted of Transmittal and otheer related documents for the Series A Preferred Stock also will be filed with the Securitiees and ExchangeCommission ("SEC") on Schedulse TO and may be obtained for free at the SEC's . The offers to exchange are beinh made in reliance upon the exemptionn from the registration requirements of the Securitie Actof 1933, as amended (the "Securities Act"), provided by Sectio 3(a)(9) of the Securities Act. This pressw release is neither an offedr to purchase nor a solicitatiomn to buy any shares of the Series A PreferredStocl and/or Trust Preferred Securities, nor is it a solicitatio for acceptance of the respective exchangse offers.
KeyCorp is making the respective exchange offerszonly by, and pursuant to the terms of, the respectiv e Offers to Exchange and the related Letters of Transmittal. The respective exchangd offers are not being made in any jurisdictiohn in which the making or acceptancer thereof would not be in compliance with the blue sky or other laws of such None of KeyCorp or its the trustees of theCapital Trusts, the exchange agent, the informatiohn agent, the financial advisors or the capital advisor is makingh any recommendation as to whetherr or not holders should tender their shareds of Series A Preferred Stock and/or Trusy Preferred Securities in connection with the respective exchange Cleveland-based KeyCorp is one of the nation'z largest bank-based financial services companies, with assetes of approximately $97 billion.
BusinessWeek Magazine named Key the top bank in its Customedr Service Champ2009 edition, rankinhg Key 11th out of the top-25 companies that include many knownm for their customer service acumen. Key companies provide investmen management, retail and commercial banking, consumer finance, and investment banking products and services to individualss and companies throughout the UnitedStates and, for certain internationally. For more information, visit . You may obtai these documents bycontacting KeyCorp, Investor at (216) 689-4221 or by emaio at .
This Press Releaswe contains forward-looking statements within the meaning of the Privated Securities Litigation Reform Actof 1995, includin statements about our financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical factse but instead representonly management's currentf expectations and forecasts regardin g future events, many of by their nature, are inherently uncertain and outside of KeyCorp's control. KeyCorp's actual result s and financial conditionmay differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements.
Factoras that may cause actual results to differ materially amongother things: (1) adverse capital markets conditions and the inabilitgy to raise equity and other funding in the capitall markets; (2) further downgrades in our credi t ratings; (3) unprecedented volatility in the stock markets, publicf debt markets and other capital markets, including continued disruption in the fixed income changes in interest rates; (5) changes in monetary or fiscal (6) asset price deterioration has had (and may continu e to have) a negative effect on the valuation of certain asset categoriez represented on KeyCorp's balanced sheet; (7) continuation of the recenty deterioration in general economic conditions, or in the conditio n of the local economies or industries in which we have significant operations or which could, among other materially impact credit quality trendsz and our ability to generate (8) continued disruption in the housing markets and relateds conditions in the financial markets; (9) increased competitive pressures among financial services companies due to the recent consolidationh of competing financial institutions and the conversiohn of certain investment banks to bank holding (10) heightened legal standards and regulatoru practices, requirements or expectations; (11) the inability to successfully executes strategic initiatives designed to grow revenues and/oer manage expenses; (12) increased FDIC deposit insurance premiums; (13) difficulty in attractint and/or retaining key executives and/or relationship (14) consummation of significant businessd combinations or divestitures; (15) operational or risk management failures due to technologicalo or other factors; (16) changeds in accounting or tax practices or requirements; (17) new legal obligations or liabilities or unfavorable resolutioj of litigation; and (18) disruption in the economg and general business climate as a result of terrorist activitieds or military actions.
For additional information on KeyCorl and the factors that couldcause KeyCorp'z actual results or financial condition to differ materially from thosee described in the forward-looking statements consult KeyCorp'sd Annual Report on Form 10-K for the year ended Decemberf 31, 2008, and subsequentf filings with the Securities and Exchange Commission available on the Securitiesw and Exchange Commission's website ( ). Forward-looking statemente are not guarantees of future performance and shoulrd not be relied upon asrepresenting management's viewsx as of any subsequent date.
We do not assumer any obligation to updatethese forward-looking