TD Issues IT1C: CaTS 6.631% 99-Year Notes with Reset

TD has announced:

an issue of $750,000,000 TD Capital Trust IV Notes – Series 3 due June 30, 2108 (“TD CaTS IV – Series 3 Notes”). The TD CaTS IV – Series 3 Notes are subordinated, unsecured debt obligations of the Trust and are expected to qualify as Tier 1 Capital of TDBFG. Any Tier 1 Capital raised by TDBFG over the 15% regulatory limit will temporarily be counted as Tier 2B Capital. The expected closing date is September 15, 2009.

From the date of issue to, but excluding, June 30, 2021, interest on the TD CaTS IV – Series 3 Notes is payable semi-annually at a rate of 6.631% per year. Starting on June 30, 2021, and on every fifth anniversary thereafter until June 30, 2106, the interest rate on the TD CaTS IV – Series 3 Notes will reset as described in the prospectus.

On or after December 31, 2014, the Trust may, at its option and subject to certain conditions, redeem the TD CaTS IV – Series 3 Notes, in whole or in part.

In certain circumstances, the TD CaTS IV – Series 3 Notes and interest thereon may be automatically exchanged for, or paid by the issuance of, non-cumulative Class A first preferred shares of TDBFG.

The TD CaTS IV – Series 3 Notes will not be listed on any stock exchange.

The Trust and TDBFG intend to file a prospectus supplement with the securities regulators in each of the provinces and territories of Canada with respect to the offering of the TD CaTS IV – Series 3 Notes.

The prospectus supplement is not yet available. It is of interest that the 6.631% coupon is equivalent to 4.74% dividend, which may – possibly – be a clue as to the level of possible high quality FixedReset preferreds. Note that the initial 6.631% rate on the CaTS IV is set for 12 years, although there is a five-year call.

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