New Issue: TD Fixed-Reset 5.00%+196bp

TD Bank has announced:

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 AA (the “Series AA 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 January 11, 2007 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 2 million Series AA 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 $250 million should this option be exercised in full.

The Series AA Shares will yield 5.00% annually, payable quarterly, as and when declared by the Board of Directors of TDBFG, for the initial period ending January 31, 2014. Thereafter, the dividend rate will reset every five years at a level of 196 basis points over the then five-year Government of Canada bond yield.

Holders of the Series AA Shares will have the right to convert their shares into non-cumulative Floating Rate Class A Preferred Shares, Series AB (the “Series AB Shares”), subject to certain conditions, on January 31, 2014, and on January 31st every five years thereafter. Holders of the Series AA 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 196 basis points.

The issue is anticipated to qualify as Tier 1 capital for TDBFG and the expected closing date is September 12, 2008.

Issue: Toronto-Dominion Bank (The) Non-Cumulative 5-Year Rate Reset Class A Preferred Shares, Series AA

Size: 8-million shares (=$200-million), greenshoe for another 2-million shares (=$50-million prior to closing.

Ratings: DBRS, Pfd-1; S&P, P-1(Low); Moody’s, Aa2

Dividend: 5.00% p.a., paid quarterly, reset every exchange date to 5-Year Canadas +196bp.

Exchange Dates: January 31, 2014 and every five years thereafter.

Exchange: Exchangeable to and from Series AB, which pays 90-day T-Bills + 196bp, reset quarterly.

Redemption: Series AA (the fixed) are redeemable (at issuer’s option, remember!) every exchange date at $25.00. Series AB (the floater) are redeemable every exchange date at $25.00 and at $25.50 at all other times.

So now there are ten … and I will have to redeem my intention to add these Fixed-Reset thingies to the HIMIPref™ universe … this would have to happen at month-end! I’ll aim for next Monday, the 8th.

4 Responses to “New Issue: TD Fixed-Reset 5.00%+196bp”

  1. […] to Issue Asset-Backed Tier 1 Paper, Swiss Bank Regulator to Impose Assets-to-Capital Multiple Cap, New Issue: TD Fixed-Reset 5.00%+196bp) so there ain’t much left to […]

  2. […] as previously noted, despite my misgivings, I have to add the fixed-resets to the HIMIPref™ universe […]

  3. […] promised, Fixed-Reset issues have been added to the HIMIPref™ […]

  4. […] of this issue were reported when the issue was announced on September […]

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