Category: New Issues

Royal Bank has announced:

a domestic public offering of $200 million of Non-Cumulative, 5 year rate reset Preferred Shares Series AT.

The bank will issue 8.0 million Preferred Shares Series AT priced at $25 per share and holders will be entitled to receive non-cumulative quarterly fixed dividend for the initial period ending August 24, 2014 in the amount of $1.5625 per share, to yield 6.25 per cent annually. The bank has granted the Underwriters an option, exercisable in whole or in part, to purchase up to an additional 3.0 million Preferred Shares at the same offering price.

Subject to regulatory approval, on or after August 24, 2014, the bank may redeem the Preferred Shares Series AT in whole or in part at par. Thereafter, the dividend rate will reset every five years at a rate equal to 4.06 per cent over the 5-year Government of Canada bond yield. Holders of Preferred Shares Series AT will, subject to certain conditions, have the right to convert all or any part of their shares to non-cumulative floating rate Preferred Shares Series AU (the “Preferred Shares Series AU”) on August 24, 2014 and on August 24 every five years thereafter.

Holders of the Preferred Shares Series AU will be entitled to receive a non-cumulative quarterly floating dividend at a rate equal to the 3-month Government of Canada Treasury Bill yield plus 4.06 per cent. Holders of Preferred Shares Series AU will, subject to certain conditions, have the right to convert all or any part of their shares to Preferred Shares Series AT on August 24, 2019 and on August 24 every five years thereafter.

The offering will be underwritten by a syndicate led by RBC Capital Markets. The expected closing date is March 9, 2009.

The first dividend will be payable August 24, for $0.71918. That’s a long, fat first dividend! Mark your calendars – there could be some interesting dividend capture opportunities!

TD Bank Financial Group 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 AI (the Series AI 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 AI 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 AI 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 4.15% over the then five-year Government of Canada bond yield.

Holders of the Series AI Shares will have the right to convert their shares into non-cumulative Floating Rate Class A Preferred Shares, Series AJ (the Series AJ Shares), subject to certain conditions, on July 31, 2014, and on July 31st every five years thereafter. Holders of the Series AJ 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 4.15%.

The issue is anticipated to qualify as Tier 1 capital for TDBFG and the expected closing date is March 6, 2009. TDBFG will make an application to list the Series AI Shares as of the closing date on the Toronto Stock Exchange.

The first dividend (if declared!) will be payable April 30, 2009, for $0.23545 based on a March 6 closing.

Update, 2009-3-4: 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 AI (the Series AI Shares) carrying a face value of $25.00 per share. This brings the total issue announced on February 25, 2009, and expected to close March 6, 2009, to 11 million shares and gross proceeds raised under the offering to $275 million. TDBFG has filed in Canada a prospectus supplement to its September 29, 2008 short form base shelf prospectus in respect of this issue.

Fresh from denying speculation regardng a common equity raise, Manulife Financial has entered into a bought-deal arrangement to issue Fixed-Resets:

Issue: Non-Cumulative Rate Reset Class A Preferred Shares, Series 4

Size: 8-million shares (=$200-million). Greenshoe for another 3-million shares (=$75-million) exercisable up to two days prior to closing.

Dividends: Fixed rate 6.60% (=$1.65 p.a.) until first Exchange Date; 5-Year Canadas +456bp thereafter, reset every Exchange Date. Floaters pay 3-month bills +456bp, reset quarterly. First Dividend $0.48370 payable 2009-6-19, based on Closing Date.

Exchange: Every Exchange Date to and from Series 5 (“Floaters”).

Exchange Date: June 19, 2014, and every five years thereafter.

Redemption: Every Exchange Data at $25.00. Floaters are also redeemable at $25.50 at all other times.

Closing Date: March 4, 2009

Update: MFC press release.

Update, 2009-2-26: Selling like hotcakes!

Manulife Financial Corporation (“Manulife”) today announced that as a result of strong investor demand for its previously announced Canadian public offering of Non-cumulative 5-Year Rate Reset Class A Preferred Shares, Series 4 (“Series 4 Preferred Shares”), the size of the offering has been increased to 14 million shares. The gross proceeds of the offering will now be $350 million. The offering will be underwritten by a syndicate of investment dealers led by RBC Capital Markets and CIBC World Markets and is anticipated to qualify as Tier 1 capital for Manulife. The expected closing date for the offering is March 4, 2009.

Manulife has also granted the underwriters an option, exercisable in whole or in part at any time up to 48 hours prior to closing, to purchase up to an additional four million Series 4 Preferred Shares. The maximum gross proceeds raised under the offering will be $450 million should this option be exercised in full. Manulife intends to file a prospectus supplement to its March 12, 2007 base shelf prospectus in respect of this issue.

The net proceeds of the offering will be used primarily for general corporate purposes and the balance will be used to reduce the amount outstanding under Manulife’s credit facility with Canadian banks.

Canadian Western Bank has announced:

that it has entered into an agreement with a group of underwriters led by Genuity Capital Markets to issue 2,600,000 Preferred Units (the “Public Offering Preferred Units”) on a bought deal basis for total proceeds of $65 million. The Public Offering Preferred Units each consist of one Non-Cumulative 5-Year Rate Reset Preferred Share, Series 3 (the “Series 3 Preferred Shares”) in the capital of the Bank with an issue price of $25.00 per share and 1.78 common share purchase warrants (each whole warrant a “Warrant”). Each Warrant will be exercisable at a price of $14.00 to purchase one common share in the capital of the Bank for five years. The Bank has also granted the underwriters an option to purchase, on the same terms, up to an additional 390,000 Public Offering Preferred Units. This option is exercisable in whole or in part by the underwriters at any time up to 30 days following the closing of the offering. The maximum gross proceeds raised under the public offering would be $74.75 million should this option be exercised in full.

The Bank has also received commitments from institutional investors, including Fairfax Financial Holdings Limited and certain pension fund clients of Alberta Investment Management Corporation, to purchase 5,400,000 Preferred Units (the “Private Placement Preferred Units”) by way of a private placement for total proceeds of $135 million. The Private Placement Preferred Units will consist of one Series 3 Preferred Share and 1.7857 Warrants. The Warrants will have the same terms at those issued under the public offering.

The private and public offerings are subject to a number of conditions, including the concurrent closing of the other. The private placement is also subject to the approval of the Minister of Finance.

The Series 3 Preferred Shares yield 7.25% annually, payable quarterly, as and when declared by the Board of Directors of CWB for an initial period ending April 30, 2014. Thereafter, the dividend rate will reset every five years at a level of 500 basis points over the then five-year Government of Canada bond yield. Holders of Series 3 Preferred Shares will, subject to certain conditions, have the option to convert their shares to Non-Cumulative Floating Rate Preferred Shares, Series 4 (the “Series 4 Preferred Shares”) on April 30, 2014 and on April 30 every five years thereafter. Holders of the Series 4 Preferred Shares will be entitled to a floating quarterly dividend rate equal to the 90-day Canadian Treasury Bill Rate plus 500 basis points, as and when declared by the Board of Directors of CWB.

The Preferred Shares Series 3 and the Preferred Shares Series 4 are anticipated to qualify as Tier 1 capital for the Bank and the closing date will be subject to the timing of the approval from the Minister of Finance. CWB will make an application to list the warrants and the Series 3 Preferred Shares as of the closing date on the Toronto Stock Exchange. CWB’s Tier 1 capital ratio was 8.9% and its total capital ratio was 13.5% as of October 31, 2008. On the assumption that $200 million of preferred units are issued through these offerings, the pro forma Tier 1 and total capital ratios as of October 31, 2008 would be approximately 11.2% and 15.8%, respectively.

Well, there’s some things going on here that I don’t understand. Why are “certain pension fund clients of Alberta Investment Management Corporation” purchasing units? Is it for flipping? Regional Pride? A sweetheart deal? Stupidity? Why would a non-taxable investor buy these things? I want to know the answer. We’ve had quite enough market-rigging by regional government-sponsored pension funds and their allies in Canada recently, thank you very much.

I also want to know why there isn’t a credit rating on these things. CWB’s recent issue of sub-debt was not and is not rated. Why isn’t CWB lifting its skirts for the rating agencies? CWB certainly looks well capitalized at this point, but I want a little public pressure in bad times for the bank to clean itself up; and the most trustworthy sparkplug for this public pressure remains the credit rating agencies.

This issue will not be tracked by HIMIPref™.

CIBC has announced:

that it had entered into an agreement with a group of underwriters led by CIBC World Markets Inc. for an issue of 8 million non-cumulative Rate Reset Class A Preferred Shares, Series 35 (the “Series 35 Shares”) priced at $25.00 per Series 35 Share to raise gross proceeds of $200 million.

CIBC has granted the underwriters an option, exercisable in whole or in part prior to closing, to purchase an additional 3 million Series 35 Shares at the same offering price. Should the underwriters’ option be fully exercised, the total gross proceeds of the financing will be $275 million.

The Series 35 Shares will yield 6.5% per annum, payable quarterly, as and when declared by the Board of Directors of CIBC, for an initial period ending April 30, 2014. On April 30, 2014 and on April 30 every five years thereafter, the dividend rate will reset to be equal to the then current five-year Government of Canada bond yield plus 4.47%.

Holders of the Series 35 Shares will have the right to convert their shares into non-cumulative Floating Rate Class A Preferred Shares, Series 36 (the “Series 36 Shares”), subject to certain conditions, on April 30, 2014 and on April 30 every five years thereafter. Holders of the Series 36 Shares will be entitled to receive a quarterly floating rate dividend, as and when declared by the Board of Directors of CIBC, equal to the three-month Government of Canada Treasury Bill yield plus 4.47%.

Holders of the Series 36 Shares may convert their Series 36 Shares into Series 35 Shares, subject to certain conditions, on April 30, 2019 and on April 30 every five years thereafter.

The expected closing date is February 4, 2009. The net proceeds of this offering will be used for general purposes of CIBC.

Update, 2009-2-3: CIBC announced on January 27:

that as a result of strong investor demand for its domestic public offering of non-cumulative Rate Reset Class A Preferred Shares, Series 35 (the “Series 35 Shares”), the size of the offering has been increased to 10 million shares. The gross proceeds of the offering will now be $250 million.

In addition, CIBC has granted the underwriters an option, exercisable in whole or in part prior to closing, to purchase up to an additional 3 million Series 35 Shares at a price of $25.00 per share. Should the underwriters’ option be fully exercised, the total gross proceeds of the financing will be $325 million.

The issue is set to close tomorrow and trade with the symbol CM.PR.L
The first dividend will be payable April 28 for $0.37842 based on closing Feb. 4

National Bank has announced:

that it has entered into an agreement with a group of underwriters led by National Bank Financial Inc. for an issue on a bought deal basis of 4 million non-cumulative 5-year rate reset first preferred shares series 26 (the “Series 26 Preferred Shares”), at a price of $25.00 per share, to raise gross proceeds of $100 million.

National Bank has also granted the underwriters an option to purchase, on the same terms, up to an additional 3 million Series 26 Preferred Shares. This option is exercisable in whole or in part by the underwriters at any time up to one business day prior to closing. The maximum gross proceeds raised under the offering will be $175 million should this option be exercised in full.

The Series 26 Preferred Shares will yield 6.60% annually, payable quarterly, as and when declared by the Board of Directors of National Bank, for the initial period ending February 15, 2014. The first of such dividends, if declared, shall be payable on May 15, 2009. Thereafter, the dividend rate will reset every five years at a level of 479 basis points over the then 5-year Government of Canada bond yield.

Holders of the Series 26 Preferred Shares will have the right to convert their shares into an equal number of non-cumulative floating rate first preferred shares series 27 (the “Series 27 Preferred Shares”), subject to certain conditions, on February 15, 2014, and on February 15th every five years thereafter. Holders of the Series 27 Preferred Shares will be entitled to receive quarterly floating dividends, as and when declared by the Board of Directors of National Bank, equal to the 90-day Government of Canada Treasury Bill rate plus 479 basis points.

The net proceeds of the offering will be used for general corporate purposes and are expected to qualify as Tier 1 capital for National Bank. The expected closing date is on or about January 30, 2009. National Bank intends to file in Canada a prospectus supplement to its December 5, 2008 base shelf prospectus in respect of this issue.

National Bank will make an application to list the Series 26 Preferred Shares and the Series 27 Preferred Shares as of the closing date on the Toronto Stock Exchange.

The initial dividend will be $0.47918 payable May 15 based on an anticipated closing January 30.

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 AG (the Series AG 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 AG 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 AG Shares will yield 6.25% annually, payable quarterly, as and when declared by the Board of Directors of TDBFG, for the initial period ending April 30, 2014. Thereafter, the dividend rate will reset every five years at a level of 438 basis points over the then five-year Government of Canada bond yield.

Holders of the Series AG Shares will have the right to convert their shares into non-cumulative Floating Rate Class A Preferred Shares, Series AH (the Series AH Shares), subject to certain conditions, on April 30, 2014, and on April 30th every five years thereafter. Holders of the Series AH 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 438 basis points.

The issue is anticipated to qualify as Tier 1 capital for TDBFG and the expected closing date is January 30, 2009. TDBFG will make an application to list the Series AG Shares as of the closing date on the Toronto Stock Exchange.

The initial dividend will be $0.38527, payable April 30, based on the anticipated closing date of January 30.

Their recent issue of TD.PR.E (Fixed Reset, 6.25%+437) was very successful … but there is a lot of competition for preferred share dollars right now!

Update, 2009-1-26: TD has announced:

that a group of underwriters led by TD Securities Inc. has exercised the option to purchase an additional 3 million non-cumulative 5-Year Rate Reset Class A Preferred Shares, Series AG (the Series AG Shares) carrying a face value of $25.00 per share. This brings the total issue announced on
January 22, 2009, and expected to close January 30, 2009, to 15 million shares and gross proceeds raised under the offering to $375 million. TDBFG will file in Canada a prospectus supplement to its September 29, 2008 short form base shelf prospectus in respect of this issue.

Update, 2009-1-29: This issue will trade as TD.PR.G

Bank of Nova Scotia has announced:

a domestic public offering of 8 million non-cumulative 6.25% 5-year rate reset preferred shares Series 28 (the “Preferred Shares Series 28”) at a price of $25.00 per share, for gross proceeds of $200 million.

Holders of Preferred Shares Series 28 will be entitled to receive a non-cumulative quarterly fixed dividend for the initial period ending April 25, 2014 yielding 6.25% per annum, as and when declared by the Board of Directors of Scotiabank. Thereafter, the dividend rate will reset every five years at a rate equal to 4.46% over the 5-year Government of Canada bond yield. Holders of Preferred Shares Series 28 will, subject to certain conditions, have the right to convert all or any part of their shares to non-cumulative floating rate preferred shares Series 29 (the “Preferred Shares Series 29”) of Scotiabank on April 26, 2014 and on April 26 every five years thereafter.

Holders of the Preferred Shares Series 29 will be entitled to receive a non-cumulative quarterly floating dividend at a rate equal to the 3-month Government of Canada Treasury Bill yield plus 4.46%, as and when declared by the Board of Directors of Scotiabank. Holders of Preferred Shares Series 29 will, subject to certain conditions, have the right to convert all or any part of their shares to Preferred Shares Series 28 on April 26, 2019 and on April 26 every five years thereafter.

The Bank has agreed to sell the Preferred Shares Series 28 to a syndicate of underwriters led by Scotia Capital Inc. on a bought deal basis. The Bank has granted to the underwriters an option to purchase up to an additional 2 million Preferred Shares Series 28 at closing, which option is exercisable by the underwriters any time up to 48 hours before closing.

Closing is expected to occur on or after January 30, 2009. This domestic public offering is part of Scotiabank’s ongoing and proactive management of its Tier 1 capital structure.

The initial dividend – if declared! – will be $0.37671 payable April 28, based on anticipated closing January 30.

Update: They’re selling like hotcakes! Scotia has announced:

that as a result of strong investor demand for its domestic public offering of non-cumulative 5-year rate reset preferred shares Series 28 (the “Preferred Shares Series 28”), the size of the offering has been increased to 10 million Preferred Shares Series 28. The gross proceeds of the offering will now be $250 million.

Update, 2009-1-29: This issue will trade as BNS.PR.X.

Royal Bank has announced:

a domestic public offering of $200 million of Non-Cumulative, 5 year rate reset Preferred Shares Series AR.

The bank will issue 8.0 million Preferred Shares Series AR priced at $25 per share and holders will be entitled to receive non-cumulative quarterly fixed dividend for the initial period ending February 24, 2014 in the amount of $1.5625 per share, to yield 6.25% annually. The bank has granted the Underwriters an option, exercisable in whole or in part, to purchase up to an additional 3.0 million Preferred Shares at the same offering price.

Subject to regulatory approval, on or after February 24, 2014, the bank may redeem the Preferred Shares Series AR in whole or in part at par. Thereafter, the dividend rate will reset every five years at a rate equal to 4.50% over the 5-year Government of Canada bond yield. Holders of Preferred Shares Series AR will, subject to certain conditions, have the right to convert all or any part of their shares to non-cumulative floating rate preferred shares Series AS (the “Preferred Shares Series AS”) on February 24, 2014 and on February 24 every five years thereafter.

Holders of the Preferred Shares Series AS will be entitled to receive a non-cumulative quarterly floating dividend at a rate equal to the 3-month Government of Canada Treasury Bill yield plus 4.50%. Holders of Preferred Shares Series AS will, subject to certain conditions, have the right to convert all or any part of their shares to Preferred Shares Series AR on February 24, 2019 and on February 24 every five years thereafter.

The offering will be underwritten by a syndicate led by RBC Capital Markets. The expected closing date is January 29, 2009.

We routinely undertake funding transactions to maintain strong capital ratios and a cost effective capital structure. Net proceeds from this transaction will be used for general business purposes.

The first dividend will be $0.49229 payable May 24, based on anticipated closing January 29.

Update, 2009-1-22: Royal announced on Jan 21:

that as a result of strong investor demand for its domestic public offering of Non-Cumulative, 5 year rate reset Preferred Shares Series AR (the “Preferred Shares Series AR”), the size of the offering has been increased to 10 million shares. The gross proceeds of the offering will now be $250 million. In addition, the bank has granted the Underwriters an option, exercisable in whole or in part, to purchase up to an additional 3 million Preferred Shares Series AR at a price of $25 per share. The offering will be underwritten by a syndicate led by RBC Capital Markets. The expected closing date is January 29, 2009.

… and announced on Jan 22:

that as a result of strong investor demand for its domestic public offering of Non-Cumulative, 5 year rate reset Preferred Shares Series AR (the “Preferred Shares Series AR”), the bank has increased the Underwriters option to 4 million Preferred Shares Series AR at a price of $25 per share.

Update, 2009-1-28: This will trade with the symbol RY.PR.R.

BNS has announced:

a domestic public offering of 8 million non-cumulative 6.25% 5-year rate reset preferred shares Series 26 (the “Preferred Shares Series 26”) at a price of $25.00 per share, for gross proceeds of $200 million.

Holders of Preferred Shares Series 26 will be entitled to receive a non-cumulative quarterly fixed dividend for the initial period ending April 25, 2014 yielding 6.25% per annum, as and when declared by the Board of Directors of Scotiabank. Thereafter, the dividend rate will reset every five years at a rate equal to 4.14% over the 5-year Government of Canada bond yield. Holders of Preferred Shares Series 26 will, subject to certain conditions, have the right to convert all or any part of their shares to non-cumulative floating rate preferred shares Series 27 (the “Preferred Shares Series 27”) of Scotiabank on April 26, 2014 and on April 26 every five years thereafter.

Holders of the Preferred Shares Series 27 will be entitled to receive a non-cumulative quarterly floating dividend at a rate equal to the 3-month Government of Canada Treasury Bill yield plus 4.14%, as and when declared by the Board of Directors of Scotiabank. Holders of Preferred Shares Series 27 will, subject to certain conditions, have the right to convert all or any part
of their shares to Preferred Shares Series 26 on April 26, 2019 and on April 26 every five years thereafter.

The Bank has agreed to sell the Preferred Shares Series 26 to a syndicate of underwriters led by Scotia Capital Inc. on a bought deal basis. The Bank has granted to the underwriters an option to purchase up to an additional 3 million Preferred Shares Series 26 at closing, which option is exercisable by the underwriters any time up to 48 hours before closing.

Closing is expected to occur on or after January 21, 2009. This domestic public offering is part of Scotiabank’s ongoing and proactive management of its Tier 1 capital structure.

The initial dividend is planned to be paid on 2009-4-28 for $0.41524, based on a January 21 closing.

It’s odd … SunLife still hasn’t done anything with its $250-million of Series 24 FixedReset 6.25%+384 acquired in partial settlement for its stake in CI. I don’t know what’s happening with those things.