PrefBlog

The Toronto-Dominion Bank has announced:

that it will exercise its right to redeem all of its 18,000,000 outstanding Non-Cumulative 5-Year Rate Reset Class A First Preferred Shares, Series 24 (Non-Viability Contingent Capital) (the “Series 24 Shares”) on July 31, 2024 at the price of $25.00 per Series 24 Share for an aggregate total of approximately $450 million. The redemption has been approved by the Office of the Superintendent of Financial Institutions.

On May 23, 2024, TD announced that dividends of $0.31875 per Series 24 Share had been declared. These will be the final dividends on the Series 24 Shares, and will be paid in the usual manner on July 31, 2024 to shareholders of record on July 10, 2024, as previously announced. After July 31, 2024, the Series 24 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 redemption amount.

Beneficial holders who are not directly the registered holder of Series 24 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. Inquiries should be directed to our Registrar and Transfer Agent, TSX Trust Company, at 1-800-387-0825 (or in Toronto 416-682-3860).

TD.PF.M was issued as a FixedReset 5.10%+356, NVCC, that commenced trading 2019-6-4 after being announced 2019-5-24. This redemption was foreshadowed by a large LRCN issue. The issue is tracked by HIMIPref™ and is assigned to the FixedReset (Premium) subindex.

Thanks to Assiduous Reader niagara for bringing this to my attention!

The Toronto-Dominion Bank has announced:

that it will exercise its right to redeem all of its 20,000,000 outstanding Non-Cumulative 5-Year Rate Reset Class A First Preferred Shares, Series 3 (Non-Viability Contingent Capital) (the “Series 3 Shares”) on July 31, 2024 at the price of $25.00 per Series 3 Share for an aggregate total of approximately $500 million. The redemption has been approved by the Office of the Superintendent of Financial Institutions.

On May 23, 2024, TD announced that dividends of $0.2300625 per Series 3 Share had been declared. These will be the final dividends on the Series 3 Shares, and will be paid in the usual manner on July 31, 2024 to shareholders of record on July 10, 2024, as previously announced. After July 31, 2024, the Series 3 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 redemption amount.

Beneficial holders who are not directly the registered holder of Series 3 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. Inquiries should be directed to our Registrar and Transfer Agent, TSX Trust Company, at 1-800-387-0825 (or in Toronto 416-682-3860).

TD.PF.B was issued as a FixedReset 3.80%+227, NVCC-compliant, issue that commenced trading 2014-7-31 after being announced 2014-7-22. TD provided notice of extension on 2019-6-25. The issue reset At 3.681% effective 2019-7-31. I recommended against conversion and there was no conversion. This redemption was foreshadowed by a big LRCN issue. The issue is tracked by HIMIPref™ and is assigned to the FixedReset (Discount) subindex.

Thanks to Assiduous Reader niagara for bringing this to my attention!

The Toronto-Dominion Bank has announced:

the pricing of a U.S. public offering of US$750 million 7.250% Fixed Rate Reset Limited Recourse Capital Notes, Series 4 (Non-Viability Contingent Capital (NVCC)) (the “LRCNs”). The LRCNs will be registered with the U.S. Securities and Exchange Commission (the “SEC”).

The LRCNs will bear interest at a rate of 7.250 per cent annually, payable quarterly, for the initial period ending on, but excluding, July 31, 2029. Thereafter, the interest rate on the LRCNs will reset every five years at a rate equal to the prevailing U.S. Treasury Rate plus 2.977 per cent. The LRCNs will mature on July 31, 2084. The expected closing date of the offering is July 3, 2024, subject to customary closing conditions.

Concurrently with the issuance of the LRCNs, TD will issue 750,000 Non-Cumulative 7.250% Fixed Rate Reset Preferred Shares, Series 31 (Non-Viability Contingent Capital (NVCC)) (“Preferred Shares Series 31”) to be held by Computershare Trust Company of Canada, as trustee for TD LRCN Limited Recourse Trust™ (the “Limited Recourse Trust”). In case of non-payment of interest on or principal of the LRCNs when due, the recourse of each LRCN holder will be limited to that holder’s proportionate share of the Limited Recourse Trust’s assets, which will consist of Preferred Shares Series 31 except in limited circumstances.

TD may redeem the LRCNs on July 31, 2029, and once every quarter-end thereafter, with the prior written approval of the Superintendent of Financial Institutions (Canada), in whole or in part on not less than 10 days’ and not more than 60 days’ prior notice to the LRCN holders.

The net proceeds from this transaction will be used for general corporate purposes, which may include the redemption of outstanding capital securities and/or the repayment of other outstanding liabilities. The proceeds from this transaction are expected to qualify as “Additional Tier 1” capital of TD for regulatory purposes.

TD Securities, Citigroup, Goldman Sachs & Co. LLC, Wells Fargo Securities, Truist Securities and US Bancorp are the joint book-running managers on the issue.

A registration statement relating to the offering has been filed with the SEC and is effective. This press release does not constitute an offer to sell, or a solicitation of an offer to buy, these securities in the United States or in any other jurisdiction where such offer, solicitation or sale would be unlawful. The offering may be made only by means of a prospectus supplement and the accompanying prospectus.

Copies of the preliminary prospectus supplement and the accompanying prospectus for the offering may be obtained free of charge by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, copies of the final prospectus supplement, when available, and the accompanying prospectus may also be obtained by contacting TD Securities (USA) LLC at 1-855-495-9846, Citigroup Global Markets Inc. at 1-800-831-9146, Goldman Sachs & Co. LLC at 1-866-471-2526, Wells Fargo Securities, LLC at 1-800-645-3751, Truist Securities, Inc. at 1-800-685-4786 and U.S. Bancorp Investments, Inc. at 1-877-558-2607.

As noted by Assiduous Reade IrateAR, this is sufficient size to redeem both TD.PF.M (18-million shares = CAD 450-million par value) and TD.PF.B (20-million shares = 500-million par value), given that USD 750-million comes to just over CAD 1-billion at current exchange rates. Both issues are redeemable 2024-7-31. TD.PF.M will come as no surprise at all, given its Issue Reset Spread of +356, but TD.PF.B … well, it’s Issue Reset Spread is a mere +227 and while it’s been trading at a much lower yield to perpetuity than its siblings for some time, it was nevertheless up 2.21% on the day (close/close). A nice win for the speculators!

I will, however, note that TD was careful not to name any specific issues when disclosing that uses for the funds raised “may include the redemption of outstanding capital securities” and nothing specific regarding either of the two issues identified as possible redemption fodder has yet been announced. So don’t get too excited just yet.

However, I continue to be encouraged by this LRCN issuance … every issue that comes out reinforces the belief that the preferred share market is cheap, cheap, cheap!

Canadian Imperial Bank of Commerce has announced:

its intention to redeem all of its issued and outstanding Non-cumulative Rate Reset Class A Preferred Shares Series 51 (Non-viability contingent capital (NVCC)) (Series 51 shares) (TSX: CM.PR.Y), for cash. The redemption will occur on July 31, 2024. The redemption price is $25.00 per Series 51 share.

The $0.321875 quarterly dividend announced on May 30, 2024 will be the final dividend on the Series 51 shares and will be paid on July 29, 2024, covering the period to July 31, 2024, to shareholders of record on June 28, 2024.

Holders of the Series 51 shares should contact the financial institution, broker or other intermediary through which they hold the shares to confirm how they will receive their redemption proceeds.

CM.PR.Y was issued as a FixedReset, 5.15%+362, NVCC, that commenced trading 2019-6-4 after being announced 2019-5-24. This redemption was foreshadowed by CM’s issuance of LRCNs “for general corporate purposes, which may include the redemption of outstanding capital securities of CIBC”, which was interpreted by the Street as meaning redemption of CM.PR.O and CM.PR.Y – although CM.PR.Y, with its Issue Reset Spread of +362bp, has long been considered a prime candidate for redemption. It is tracked by HIMIPref™ and has been assigned to the FixedReset (Discount) subindex.

Thanks to Assiduous Readers PS and IrateAR for bringing this to my attention!

Canadian Imperial Bank of Commerce has announced:

its intention to redeem all of its issued and outstanding Non-cumulative Rate Reset Class A Preferred Shares Series 39 (Non-viability contingent capital (NVCC)) (Series 39 shares) (TSX: CM.PR.O), for cash. The redemption will occur on July 31, 2024. The redemption price is $25.00 per Series 39 share.

The $0.232063 quarterly dividend announced on May 30, 2024 will be the final dividend on the Series 39 shares and will be paid on July 29, 2024, covering the period to July 31, 2024, to shareholders of record on June 28, 2024.

Holders of the Series 39 shares should contact the financial institution, broker or other intermediary through which they hold the shares to confirm how they will receive their redemption proceeds.

CM.PR.O was issued as a FixedReset, 3.90%+232, NVCC-compliant, that commenced trading 2014-6-11 after being announced 2014-6-2. The extension was announced 2019-6-12. The issue reset At 3.713% effective July 31, 2019. I recommended against conversion and there was no conversion. This redemption was foreshadowed by CM’s issuance of LRCNs “for general corporate purposes, which may include the redemption of outstanding capital securities of CIBC”, which was interpreted by the Street as meaning redemption of CM.PR.O and CM.PR.Y. CM.PR.O is tracked by HIMIPref™ and is assigned to the FixedReset (Discount) subindex.

Thanks to Assiduous Readers PS and IrateAR for bringing this to my attention!