PrefBlog

Royal Bank has announced:

a domestic public offering of $200 million of Non-Cumulative, 5 year rate reset Preferred Shares Series AV.

The bank will issue 8 million Preferred Shares Series AV priced at $25 per share and holders will be entitled to receive non-cumulative quarterly fixed dividend for the initial period ending August 24, 2014 in the amount of $1.5625 per share, to yield 6.25 per cent annually. The bank has granted the Underwriters an option, exercisable in whole or in part, to purchase up to an additional 3.0 million Preferred Shares at the same offering price.

Subject to regulatory approval, on or after August 24, 2014, the bank may redeem the Preferred Shares Series AV in whole or in part at par. Thereafter, the dividend rate will reset every five years at a rate equal to 4.42 per cent over the 5-year Government of Canada bond yield. Holders of Preferred Shares Series AV will, subject to certain conditions, have the right to convert all or any part of their shares to non-cumulative floating rate preferred shares Series AW (the “Preferred Shares Series AW”) on August 24, 2014 and on August 24 every five years thereafter.

Holders of the Preferred Shares Series AW will be entitled to receive a non-cumulative quarterly floating dividend at a rate equal to the 3-month Government of Canada Treasury Bill yield plus 4.42 per cent. Holders of Preferred Shares Series AW will, subject to certain conditions, have the right to convert all or any part of their shares to Preferred Shares Series AV on August 24, 2019 and on August 24 every five years thereafter.

The offering will be underwritten by a syndicate led by RBC Capital Markets. The expected closing date is April 1, 2009.

There is a long first dividend: $0.62072 payable August 24, based on the anticipated closing.

Update: RBC has announced:

that as a result of strong investor demand for its domestic public offering of Non-Cumulative, 5 year rate reset Preferred Shares Series AV (the “Preferred Shares Series AV”), the size of the offering has been increased to 13 million shares. The gross proceeds of the offering will now be $325 million. In addition, the bank has granted the Underwriters an option, exercisable in whole or in part, to purchase up to an additional 3 million Preferred Shares Series AV at a price of $25 per share. The offering will be underwritten by a syndicate led by RBC Capital Markets. The expected closing date is April 1, 2009.

Update, 2009-4-10: The greenshoe was exercised in full and the issue is worth par value $400-million.

This entry was posted on Tuesday, March 24th, 2009 at 12:17 pm and is filed under New Issues. 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.