KeyCorp (KEY) today announced that it has commenced an underwritten public offering of $625 million of its common stock to repurchase the $2.5 billion of Series B Fixed-Rate Cumulative Perpetual Preferred Stock it issued to the U.S. Treasury under the TARP Capital Purchase Program. According to the company, it will proceed with these capital actions pursuant to its capital plan submitted to the Federal Reserve on January 7, 2011. KEY has been informed that the Federal Reserve had no objections to the capital actions set forth in its plan. After repurchase of the TARP preferred stock is completed, KEY will enter into negotiations to repurchase the warrant held by the U.S. Treasury. The company also intends to 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. Shares are up 3.16% to $9.13.