TD.PR.P & TD.PR.Q To Be Redeemed

The Toronto-Dominion Bank has announced:

that it will exercise its right to redeem all of its 10 million outstanding Non-cumulative Redeemable Class A First Preferred Shares, Series P (the “Series P Shares”) on March 2, 2015 at the cash redemption price of $25.607877 per Series P Share, for total redemption proceeds of approximately $256 million.

TD also announced it will exercise its right to redeem all of its 8 million outstanding Non-cumulative Redeemable Class A First Preferred Shares, Series Q (the “Series Q Shares”) on March 2, 2015 at the cash redemption price of $25.615068 per Series Q Share, for total redemption proceeds of approximately $205 million.

The cash redemption price in each case represents the sum of the redemption amount of $25.50 per share, plus an amount equal to the applicable quarterly cash dividend pro rated for the period from and including January 31, 2015 to but excluding March 2, 2015. Regular quarterly dividends of $0.328125 per Series P Share and $0.35 per Series Q Share will be paid in the usual manner on January 31, 2015 to shareholders of record on January 8, 2015, as previously announced.

From and after March 2, 2015, the Series P Shares and Series Q Shares will cease to be entitled to dividends and the only remaining rights of holders of such shares will be to receive payment of the applicable cash redemption price.

Beneficial holders who are not directly the registered holder of Series P Shares or Series Q Shares should contact the financial institution, broker or other intermediary through which they hold these shares to confirm how they will receive their redemption proceeds. Instructions with respect to receipt of the redemption amount will be set out in the Letter of Transmittal to be mailed to registered holders of the Series P Shares and Series Q Shares shortly. Inquiries should be directed to our Registrar and Transfer Agent, CST Trust Company, at 1-800-387-0825 (or in Toronto 416-682-3860).

TD.PR.P is a Straight Perpetual, 5.25%, that commenced trading 2007-11-1 after being announced 2007-10-9. The issue was poorly received – there was an inventory blow-out sale 2007-11-14

TD.PR.Q is a Straight Perpetual, 5.60%, that commenced trading 2008-1-31 after being announced 2008-1-22.

Both issues are NVCC non-compliant and so currently reside in the DeemedRetractibles index.

There are special tax implications with respect to these redemptions! Both redemptions are priced above par ($25.50 in both cases, plus accrued dividends) and the $0.50 premium will be taxable to those who receive it as a Deemed Dividend, which is to say, a Dividend. Many, if not most, if not almost all taxable investors will be better off selling their shares – even at a few pennies discount from the redemption value – and taking the difference as a capital gain (or reduced capital loss). Please consult your personal tax advisor.

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