PrefBlog

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