PrefBlog

TD Bank has announced:

that it has entered into an agreement with a group of underwriters led by TD Securities Inc. for an issue of 8 million non-cumulative 5-Year Rate Reset Class A Preferred Shares, Series AK (the Series AK Shares), carrying a face value of $25.00 per share, to raise gross proceeds of $200 million. TDBFG intends to file in Canada a prospectus supplement to its September 29, 2008 base shelf prospectus in respect of this issue.

TDBFG has also granted the underwriters an option to purchase, on the same terms, up to an additional 3 million Series AK Shares. This option is exercisable in whole or in part by the underwriters at any time up to two business days prior to closing. The maximum gross proceeds raised under the offering will be $275 million should this option be exercised in full.

The Series AK Shares will yield 6.25% annually, payable quarterly, as and when declared by the Board of Directors of TDBFG, for the initial period ending July 31, 2014. Thereafter, the dividend rate will reset every five years at a level of 4.33% over the then five-year Government of Canada bond yield.

Holders of the Series AK Shares will have the right to convert their shares into non-cumulative Floating Rate Class A Preferred Shares, Series AL (the Series AL Shares), subject to certain conditions, on July 31, 2014, and on July 31st every five years thereafter. Holders of the Series AL Shares will be entitled to receive quarterly floating dividends, as and when declared by the Board of Directors of TDBFG, equal to the three-month Government of Canada Treasury bill yield plus 4.33%.

The issue is anticipated to qualify as Tier 1 capital for TDBFG and the expected closing date is April 3, 2009. TDBFG will make an application to list the Series AK Shares as of the closing date on the Toronto Stock Exchange.

The first dividend will be payable July 31 and be for $0.50942 based on the anticipated April 3 closing.

It is noteworthy – to me! – that the 433bp spread on this issue is equal to the recent CM.PR.M FixedReset 6.50%+433. This means that I don’t have to fiddle around the HIMIPref™ software so much! Assiduous Readers may recall that design decisions made long before the advent of this flood of FixedResets has made the programmatic definition of differing spread rates a rather fiddlesome thing.

Update, 2009-3-31: TD has announced:

that a group of underwriters led by TD Securities Inc. has exercised its option in full to purchase an additional 3 million non-cumulative 5-Year Rate Reset Class A Preferred Shares, Series AK (the Series AK Shares) carrying a face value of $25.00 per share. This brings the total issue announced on
March 26, 2009, and expected to close April 3, 2009, to 14 million shares and gross proceeds raised under the offering to $350 million. TDBFG has filed in Canada a prospectus supplement to its September 29, 2008 short form base shelf prospectus in respect of this issue.

This entry was posted on Wednesday, March 25th, 2009 at 11:30 am 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.