Form 4: Bank of Nova Scotia Reduces KeyCorp Stake

Bank of Nova Scotia reported the disposition of 128,055 KeyCorp common shares at $21.16 each, as part of a pre-arranged investment agreement.

Summary

• Bank of Nova Scotia, a 10% owner and deemed director of KeyCorp, reported a disposition of 128,055 common shares.
• The transaction occurred on January 27, 2026, with shares sold at a price of $21.16 per share.
• Following this transaction, Bank of Nova Scotia directly beneficially owns 161,840,707 KeyCorp common shares.
• The disposition was made pursuant to an Investment Agreement dated August 12, 2024, between Bank of Nova Scotia and KeyCorp.
• This agreement allows Bank of Nova Scotia to participate pro rata in any repurchase by KeyCorp of its common shares.
• The transaction was made pursuant to a Rule 10b5-1(c) plan.

Sentiment

Score: 5

Explanation: The transaction is a pre-arranged disposition by a significant shareholder, part of an existing investment agreement and a Rule 10b5-1 plan. It is a routine event and does not indicate a significant positive or negative shift in the company's outlook or the reporting person's view.

Positives

• The disposition is part of a pre-arranged Investment Agreement, indicating a structured and expected transaction rather than an opportunistic sale.
• The transaction price of $21.16 per share represents a realization of value for Bank of Nova Scotia.
• For KeyCorp, the underlying share repurchase program (which this disposition relates to) can be positive for remaining shareholders by reducing share count.

Negatives

• A significant shareholder reducing its stake, even if pre-arranged, could be perceived negatively by some investors.

Risks

• No specific risks are detailed in this Form 4 beyond the inherent risks of holding equity securities.

Future Outlook

The Investment Agreement between Bank of Nova Scotia and KeyCorp outlines a framework for Bank of Nova Scotia's pro rata participation in future share repurchases by KeyCorp, suggesting ongoing, structured adjustments to its ownership stake.

Management Comments

• Solely for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, the Reporting Person may be deemed to be a director-by-deputization by virtue of the Reporting Person's contractual right to nominate directors to the board of directors of the Issuer pursuant to the Investment Agreement.

Industry Context

This transaction represents a routine insider filing for a large financial institution (Bank of Nova Scotia) adjusting its stake in another financial services company (KeyCorp). Such dispositions, especially when pre-arranged, are common for significant institutional investors managing their portfolio exposure or participating in issuer-led share repurchase programs.

Corporate Governance

Related Party Transactions

• The disposition of shares is pursuant to an Investment Agreement dated August 12, 2024, between Bank of Nova Scotia (a 10% owner and deemed director) and KeyCorp. This agreement and the related pro rata participation in share repurchases constitute a related party transaction.

Stakeholder Impact

• Shareholders: The disposition by a major shareholder, while pre-arranged, slightly reduces the institutional ownership concentration. The underlying share repurchase program, which this disposition relates to, can be accretive to earnings per share for remaining shareholders.
• Management: The transaction aligns with the terms of the Investment Agreement, indicating adherence to established corporate arrangements.

Next Steps

• Bank of Nova Scotia is expected to continue participating pro rata in any future share repurchases by KeyCorp, as outlined in the Investment Agreement.

Key Dates

Recommendation

This Form 4 details a routine, pre-arranged disposition of shares by a significant institutional investor (Bank of Nova Scotia) in KeyCorp. The transaction is part of an existing Investment Agreement and a Rule 10b5-1 plan, indicating it is an expected portfolio adjustment rather than a signal of new fundamental information. It does not provide new insights that would warrant a change in investment recommendation based solely on this filing.

Keywords

KeyCorp, Bank of Nova Scotia, Form 4, Share Disposition, Insider Transaction, 10% Owner, Rule 10b5-1, Investment Agreement, Share Repurchase