The Bank of Nova Scotia has announced:
that 5,184,345 of the 16,360,000 Non-cumulative 5-Year Rate Reset Preferred Shares Series 32 of Scotiabank (the “Preferred Shares Series 32”) have been elected for conversion on February 2, 2016, on a one-for-one basis, into Non-cumulative Floating Rate Preferred Shares Series 33 of Scotiabank (the “Preferred Shares Series 33”). Consequently, on February 2, 2016, Scotiabank will have 11,175,655 Preferred Shares Series 32 and 5,184,345 Preferred Shares Series 33 issued and outstanding. The Preferred Shares Series 32 and Preferred Shares Series 33 will be listed on the Toronto Stock Exchange under the symbols BNS.PR.Z and BNS.PR.F, respectively.
Assiduous Readers will remember that BNS.PR.Z will reset to 2.063%, while the FloatingReset issue, BNS.PR.F, will pay 3-Month T-Bills + 134bp, reset quarterly. I recommended against conversion.
Will the new floater be non NVCC as well?
Will the new floater be non NVCC as well?
Yes. At the time these shares were designed, nobody knew what NVCC stood for, never mind how to make them compliant.
In addition, remember that BNS.PR.F will be convertible back into BNS.PR.Z at the next Exchange Date (unless the whole thing is called, of course). OSFI would take a dim view of Tier 1 Capital suddenly disappearing because the holders decided to swap out.