CWB.PR.B To Be Extended

Canadian Western Bank has announced (on March 11):

that it does not intend to exercise its right to redeem all or any of its currently outstanding 5,000,000 non-cumulative 5-year rate reset First Preferred Shares Series 5 (the “Series 5 Preferred Shares”) (TSX: CWB.PR.B) on April 30, 2019. As a result, subject to certain conditions described in the prospectus supplement dated February 3, 2014 relating to the issuance of the Series 5 Preferred Shares (the “Prospectus”), the holders of the Series 5 Preferred Shares have the right, at their option, to convert any or all of their Series 5 Preferred Shares into an equal number of CWB’s non-cumulative floating rate First Preferred Shares Series 6 (the “Series 6 Preferred Shares”), subject to certain conditions, on April 30, 2019. In accordance with the share conditions, a formal notice of the right to convert Series 5 Preferred Shares into Series 6 Preferred Shares will be sent to the registered holders of the Series 5 Preferred Shares. Holders of Series 5 Preferred Shares are not required to elect to convert all or any part of their Series 5 Preferred Shares into Series 6 Preferred Shares. Holders who do not exercise their right to convert their Series 5 Preferred Shares into Series 6 Preferred Shares on April 30, 2019 will retain their Series 5 Preferred Shares, unless automatically converted in accordance with the conditions below.

The foregoing conversion right is subject to the conditions that: (i) if, after April 15, 2019, CWB determines that there would be less than 500,000 Series 6 Preferred Shares outstanding on April 30, 2019, then no Series 5 Preferred Shares will be converted into Series 6 Preferred Shares, and (ii) alternatively, if after, April 15, 2019, CWB determines that there would be less than 500,000 Series 5 Preferred Shares outstanding on April 30, 2019, then all remaining Series 5 Preferred Shares will automatically be converted into an equal number of Series 6 Preferred Shares on April 30, 2019. In either case, CWB will give written notice to that effect to any registered holders of Series 5 Preferred Shares affected by the preceding minimums on or before April 23, 2019.

The dividend rate applicable to the Series 5 Preferred Shares for the 5-year period commencing on May 1, 2019, and ending on and including April 30, 2024, and the dividend rate applicable to the Series 6 Preferred Shares for the 3-month period commencing on May 1, 2019, and ending on and including July 31, 2019, will be determined and announced by way of a news release on April 1, 2019. CWB will also give written notice of these dividend rates to the registered holders of Series 5 Preferred Shares.

Beneficial owners of Series 5 Preferred Shares who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (EDT) on April 15, 2019. Conversion inquiries should be directed to CWB’s Registrar and Transfer Agent, Computershare, at 1-800-564-6253.

Subject to certain conditions described in the Prospectus, CWB may redeem the Series 5 Preferred Shares, in whole or in part, on April 30, 2024 and on April 30 every five years thereafter and may redeem the Series 6 Preferred Shares, in whole or in part, after April 30, 2019.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 6 Preferred Shares effective upon conversion. Listing of the Series 6 Preferred Shares is subject to CWB fulfilling all the listing requirements of the TSX and, upon approval, the Series 6 Preferred Shares will be listed on the TSX under the trading symbol “CWB.PR.E”.

CWB.PR.B is a FixedReset, 4.40%+276, that commenced trading 2014-2-10 after being announced 2014-1-31. It is tracked by HIMIPref™ but relegated to the Scraps – FixedReset (Discount) index on credit concerns.

I will have more to say about the desirability of conversion when the reset rate is announced on April 1.

2 Responses to “CWB.PR.B To Be Extended”

  1. […] Thanks to Assiduous Reader niagara for bringing this to my attention! […]

Leave a Reply

You must be logged in to post a comment.