PrefBlog

I have been under the impression that BNS.PR.Z has a Regulatory Event clause and made mention of this when the issue was posted for trading. This assertion was based on the December 2 Material Documents:

Lock-Up Agreeement (Material Document, English, Dec. 2, 2010, 310K)

Upon the occurrence of a Regulatory Event, BNS may, at its option, with the prior approval of the Superintendent, on not more than 60 nor less than 30 days’ notice, redeem all or any number of the then outstanding Floating Rate Preferred Shares upon payment in cash for each Floating Rate Preferred Share so redeemed of an amount equal to $25.00 per Floating Rate Preferred Share together with all declared and unpaid dividends to the date fixed for redemption.

“Regulatory Event” means the receipt by BNS of a notice or advice from the Superintendent that all or any portion of the Floating Rate Preferred Shares no longer qualify as Tier 1 capital under the Canadian bank capital guidelines issued by the Superintendent or other governmental authority in Canada concerning the maintenance of adequate capital reserves by Canadian chartered banks, including BNS, from time to time.

Support Agreement (Material Document – English, December 2, 2010, 374K)

Upon the occurrence of a Regulatory Event, the Offeror may, at its option, with the prior approval of the Superintendent, on not more than 60 nor less than 30 days’ notice, redeem all or any number of the then outstanding Offeror Reset Preferred Shares upon payment in cash for each Offeror Reset Preferred Share so redeemed of an amount equal to $25.00 per Offeror Reset Preferred Share together with all declared and unpaid dividends to the date fixed for redemption.

“Regulatory Event” means the receipt by the Offeror of a notice or advice from the Superintendent that all or any portion of the Offeror Reset Preferred Shares no longer qualify as Tier 1 capital under the Canadian bank capital guidelines issued by the Superintendent or other governmental authority in Canada concerning the maintenance of adequate capital reserves by Canadian chartered banks, including the Offeror, from time to time.

However, when looking for definitive, prospectus-like, language to quote to exemplify a Regulatory Event I found:

Security Holders Documents – English, February 1, 2011:

Nothing. There is nothing I can see in the Security Holders’ Documents that would indicate that the bank has the option to call at par given the occurance of a Regulatory Event.

There is also nothing in the Offer to Purchase … DundeeWealth dated 2010-12-15, which is linked on the Scotia preferred share page as the “Prosp.”.

There is also nothing in the similarly linked Share Terms, which I believe is idential to the the “Security Holders Documents” on SEDAR.

So what happened?

This entry was posted on Monday, February 21st, 2011 at 12:15 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.