PrefBlog

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.

Royal Bank has announced:

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

The bank will issue 8.0 million Preferred Shares Series AP 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 AP in whole or in part at par. Thereafter, the dividend rate will reset every five years at a rate equal to 4.19% over the 5 year Government of Canada bond yield. Holders of Preferred Shares Series AP 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 AQ (the “Preferred Shares Series AQ”) on February 24, 2014 and on February 24 every five years thereafter.

Holders of the Preferred Shares Series AQ 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 4.19%. Holders of Preferred Shares Series AQ will, subject to certain conditions, have the right to convert all or any part of their shares to Preferred Shares Series AP 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 14, 2009.

January 14 will be a busy day! The new NA 6.60%+463 and TD 6.25%+437 issues will also be settling then.

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 5 million non-cumulative 5-year rate reset first preferred shares series 24 (the “Series 24 Preferred Shares”), at a price of $25.00 per share, to raise gross proceeds of $125 million.

National Bank has also granted the underwriters an option to purchase, on the same terms, up to an additional 3 million Series 24 Preferred 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 $200 million should this option be exercised in full.

The Series 24 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 463 basis points over the then 5-year Government of Canada bond yield.

Holders of the Series 24 Preferred Shares will have the right to convert their shares into an equal number of non-cumulative floating rate first preferred shares series 25 (the “Series 25 Preferred Shares”), subject to certain conditions, on February 15, 2014, and on February 15th every five years thereafter. Holders of the Series 25 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 463 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 14, 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 24 Preferred Shares and the Series 25 Preferred Shares as of the closing date on the Toronto Stock Exchange.

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 7 million non-cumulative 5-Year Rate Reset Class A Preferred Shares, Series AE (the Series AE Shares), carrying a face value of $25.00 per share, to raise gross proceeds of $175 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 3 million Series AE 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 AE 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 437 basis points over the then five-year Government of Canada bond yield.

Holders of the Series AE Shares will have the right to convert their shares into non-cumulative Floating Rate Class A Preferred Shares, Series AF (the Series AF Shares), subject to certain conditions, on April 30, 2014, and on April 30th every five years thereafter. Holders of the Series AF 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 437 basis points.

The issue is anticipated to qualify as Tier 1 capital for TDBFG and the expected closing date is January 14, 2009. TDBFG will make an application to list the Series AE Shares as of the closing date on the Toronto Stock Exchange.

Update, 2009-1-6: Later on January 5, TD announced:

that as a result of strong investor demand for its domestic public offering of non-cumulative 5-Year Rate Reset Class A Preferred Shares, Series AE (the Series AE Shares), the size of the offering has been increased to 9 million shares. The gross proceeds of the offering will now be $225 million. TDBFG intends to file in Canada a prospectus supplement to its January 11, 2007 base shelf prospectus in respect of this issue.

and on January 6, TD 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 AE (the Series AE Shares) carrying a face value of $25.00 per share. This brings the total issue announced on January 5, 2009, and expected to close January 14, 2009, to 12 million shares and gross
proceeds raised under the offering to $300 million. TDBFG will file in Canada a prospectus supplement to its January 11, 2007 short form base shelf prospectus in respect of this issue.

Perhaps intruiged by recent queries about USD Prefs with eligible dividends and distraught at the idea that there is a fragment of the capital markets left untapped, Brookfield Asset Management has issued a Preliminary Short Form Base Shelf Prospectus for USD 1-billion in debt securities and Class A Preference Shares.

Sorry I can’t link to it, but that would constitute dissemination of public information to the public, which the regulators have sworn to stamp out. Can’t have just anybody linking to a prospectus, eh? It’s on SEDAR, dated December 30.

There is no indication as to whether the dividends will be eligible for the full dividend tax credit – that will have to wait for the supplementary prospectus for a specific issue.

To my disappointment, the specific terms of the Australian refinancing have still not been disclosed. All it says is:

Also in November 2008, the Company announced that it had finalized an agreement to extend the final maturity of a debt financing of its Australian operations by one year. Under the terms of the agreement, the loan will be US$800 million of which US$140 million will be repaid in April 2009 and the balance in April 2010. The Company also announced its intention to combine all of its European operations into a single operating platform and to refinance it on a longer-term basis in the European markets.

Many thanks to Assiduous Reader MP – who, I suspect, is angling for a job as PrefBlog’s Regulatory Filings Editor – for bringing this to my attention.

I have some more information on the new issue of BNS Fixed-Resets that was previously discussed when Scotia announced the issuance as partial settlement of their purchase of a big chunk of CI from SunLife.

This comes from the Bank’s recent filing on SEDAR of a Material Change Reporte dated 2008-12-5: an “Amending Agreement” dated 2008-12-3, schedule 2.03.

Issue: Preferred Shares Series 24

Dividends: Initial Rate 6.25% until the first Exchange Date, 5-Year Canadas + 384bp thereafter. First Dividend $0.5865 [unless the closing date changes] payable 2009-4-28. The closing date is specified in the Amending Agreement only as:

“Closing Date” means the date that is six (6) Business Days after all conditions to the purchase and sale of the Securities set out in Sections 5.01 and 5.02 (other than those conditions that by their nature can only be satisfied on the Closing Date) having been satisfied or waived or (ii) such other date as may be agreed to in writing by the Vendors and the Purchaser.

… but $0.5685 is 137 days’ coupon at 6.25%, implying a projected Closing Date of 2008-12-12 … assuming that the dividend is payable on the last day of its accrual. Floaters pay 3-Month Bills + 384bp, reset quarterly.

Size: 10-million shares (=$250-million).

Exchange Dates: 2014-1-26 and every five years thereafter.

Redemption: Every Exchange Date at $25.00. Floaters redeemable every exchange date at $25.00 and at $25.50 at all other times.

Convertable: Every Exchange Date to and from Series 25 (“Floaters”)

There is nothing specific about the plan of distribution, but Section 2.11 of the Amended Agreement states:

The Purchase Agreement is amended by (i) deleting “and” at the end of Section 5.02(d), (ii) deleting the period at the end of Section 5.02(e) and substituting therefor “;”, and (iii) adding the following immediately after Section 5.02(e) thereof:

“(f) The Purchaser will have (i) prepared and filed with the Ontario Securities Commission, as principal regulator, and with the securities regulatory authorities in each of the other provinces and territories of Canada (together with the Province of Ontario, “Qualifying Jurisdictions”) and received a receipt or other decision document therefor, an amendment to the Purchaser’s short form base shelf prospectus dated April 16, 2008 (the “Prospectus”), and (ii) prepared and filed a prospectus supplement to the Prospectus (together, the “Prospectus Supplement”) with the Ontario Securities Commission, as principal regulator, and with securities regulatory authorities in each of the other Qualifying Jurisdictions, qualifying the distribution to the Vendors, as applicable, of the BNS Common Shares and BNS Preferred Shares contemplated by Section 2.06; and

(g) The BNS Common Shares and BNS Preferred Shares contemplated by Section 2.06 will be listed on the Toronto Stock Exchange and the Series 25 Preferred Shares will be conditionally listed on the Toronto Stock Exchange.”

Update, 2008-12-11: There is a prospectus supplement describing these shares on SEDAR, filed by Bank of Nova Scotia on 2008-12-9.

This is not the usual reporting of a new issue!

Back in October, Scotia announced:

Scotiabank has agreed to purchase 104,609,895 trust units of CI from Sun Life for approximately $2.3 billion in cash representing all of Sun Life’s 37 per cent ownership stake in CI.

Today, Scotia has announced:

that the Bank plans to close its 37 per cent strategic investment in CI Financial Income Fund (“CI”; TSX: CIX.UN) next week, pending receipt of executed agreements, regulatory approvals and acceptance by the Toronto Stock Exchange.

Scotiabank is purchasing Sun Life Financial’s (“Sun Life” TSX/NYSE:SLF) stake of 104,609,895 CI trust units for $1.55 billion in cash, $500 million in common shares at $34.60 per share and $250 million in 6.25 per cent rate reset preferred shares.

That’s it. That’s all I know. None of the extant BNS Fixed-Resets have a 6.25% initial coupon, so this would be a new issue rather than a re-opening.

The Globe & Mail reports:

National Bank Financial analyst Robert Sedran said Scotiabank’s Tier 1 capital ratio, the key measure that regulator’s watch, had been expected to dip to 8.8 per cent if the deal for the stake in CI had been all-cash. With the changes, Scotiabank’s Tier 1 ratio will now be about 9.1 per cent, he said. Regulators require the ratio, which is a measure of a bank’s capital against its assets weighted by the risk they pose, to stay above 7 per cent.

Scotiabank said it will issue $500-million in common shares to Sun Life at $34.60 per share, and $250-million in 6.25 per cent rate reset preferred shares.

The $34.60 equity price is almost 7 per cent higher to yesterday’s closing price, Mr. Aiken noted.

So what is this? Will Sunlife sell the shares in a secondary offering? Will there be a primary offering by Scotia of this issue? Will the shares come with a prospectus, or is it to be a restricted private placement forever?

Stay tuned!