RY.PR.S

RBC announced on August 25 that this issue will be redeemed at a price of $26.00 on October 6.

The total issue size is 10-million shares, representing $250-million in bank capital.

It was paying $1.525 (issue yield = 6.1%) and its first day of trading was June 26, 2001.

The call schedule was:

  • Redemption      2006-08-24      2007-08-23  26.000000
  • Redemption      2007-08-24      2008-08-23  25.750000
  • Redemption      2008-08-24      2009-08-23  25.500000
  • Redemption      2009-08-24      2010-08-23  25.250000
  • Redemption      2010-08-24      2999-12-29  25.000000

Although they could have saved themselves $0.25 annually on the call price by waiting, Royal would have had to have paid the $1.525 dividend at the same time, for a net cost of $1.275. Since their recent RY.PR.A issue pays $1.1125 and RY.PR.B pays $1.175, it’s not too surprising that such an expensive issue is being called now.

Update 2006-09-27 : See also the August 11, 2006 Comment.

This entry was posted on Tuesday, August 29th, 2006 at 9:07 pm and is filed under Issue Comments. 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.

3 Responses to “RY.PR.S”

  1. PrefBlog » Blog Archive » September 5, 2006 says:
    September 5, 2006 at 9:36 pm

    […] This issue has been called for value October 6. Nesbitt crossed 288,000 at $26.09 […]

  2. PrefBlog » Blog Archive » September 15, 2006 says:
    September 18, 2006 at 12:50 pm

    […] YTW 4.23% based on call effective March ‘07; it pays $1.50, just a shade under the RY.PR.S, which paid $1.525 and were called at a similar premium at the first opportunity. […]

  3. PrefBlog » Blog Archive » RY.PR.S Redemption Settles says:
    October 10, 2006 at 9:21 pm

    […] As noted in an earlier post, October 6 was the last day of trading in this issue … see RBC’s press release for more details. […]

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