Ally Financial Inc. (NYSE: ALLY) announced on May 4, 2026, that it has issued a formal notice to redeem all 1.35 million outstanding shares of its Fixed-to-Floating Rate Cumulative Perpetual Preferred Stock, Series B. The redemption is scheduled to take place on May 15, 2026, marking a significant move in the company’s ongoing capital management strategy. The transaction involves an aggregate liquidation preference of $1.35 billion, representing the full outstanding volume of this specific security class.
The redemption price for each share is established at $1,000, which is the par value and liquidation preference of the Series B Preferred Stock. In addition to the principal amount, Ally Financial will pay an amount equal to any declared and unpaid dividends for the period up to, but excluding, the redemption date of May 15. The company stated that once the redemption is finalized, dividends on these shares will cease to accrue, and all rights of the holders will be extinguished, leaving only the right to receive the cash payment of the redemption price.
The Series B Preferred Stock was designed with a fixed-to-floating rate structure, a common feature for bank-issued preferred securities intended to qualify as Tier 1 capital. By redeeming these shares in full, Ally is adjusting its capital stack and reducing its future dividend obligations. This action follows the company’s internal review of its capital requirements and its objective to maintain a robust Common Equity Tier 1 (CET1) ratio while managing the cost of its regulatory capital. The decision to retire the Series B shares reflects the firm's assessment of its current capital levels and long-term funding needs.
Payment for the shares will be coordinated through the Depository Trust Company (DTC) for all shares held in book-entry form. For any shares held in physical certificate form, Ally has designated Computershare Trust Company, N.A. to serve as the redemption and paying agent. Shareholders are expected to receive formal notification regarding the specific procedures for surrendering their shares to receive payment. The company emphasized that the redemption is being conducted in accordance with the terms set forth in the certificate of designations governing the Series B Preferred Stock.
Headquartered in Detroit, Ally Financial operates as a major digital-only financial institution with a strong emphasis on automotive lending and retail banking. As of early 2026, the firm reported serving over 11 million customers and maintaining a significant presence in the U.S. consumer credit market. Chief Financial Officer Russell Hutchinson has previously indicated that the firm remains focused on disciplined capital allocation and balance sheet efficiency. This $1.35 billion redemption is consistent with those stated objectives and reflects the company's current liquidity position and capital surplus as of the second quarter of 2026.