PrefBlog

Bank of Montreal has announced:

that it does not intend to exercise its right to redeem the currently outstanding Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 44 (Non-Viability Contingent Capital (NVCC)) of the Bank (the “Preferred Shares Series 44”) on November 25, 2023. As a result, subject to certain conditions, the holders of Preferred Shares Series 44 have the right, at their option, to convert all or part of their Preferred Shares Series 44 on a one-for-one basis into Non-Cumulative Floating Rate Class B Preferred Shares, Series 45 (Non-Viability Contingent Capital (NVCC)) of the Bank (the “Preferred Shares Series 45”) on November 25, 2023. Holders who do not exercise their right to convert their Preferred Shares Series 44 into Preferred Shares Series 45 on such date will retain their Preferred Shares Series 44, unless automatically converted in accordance with the conditions below.

The foregoing conversions are subject to the conditions that:

(i) if, after November 10, 2023, the Bank determines that there would be fewer than 1,000,000 Preferred Shares Series 44 outstanding on November 25, 2023 after giving effect to such conversions, then all remaining Preferred Shares Series 44 will automatically be converted into an equal number of Preferred Shares Series 45 on November 25, 2023; and

(ii) alternatively, if the Bank determines that there would be fewer than 1,000,000 Preferred Shares Series 45 outstanding on November 25, 2023 after giving effect to such conversions, then no Preferred Shares Series 44 will be converted into Preferred Shares Series 45.

In either case, the Bank will give written notice to that effect to any registered holders of Preferred Shares Series 44 affected by the preceding minimums on or before November 17, 2023.

The dividend rate applicable to the Preferred Shares Series 44 for the 5-year period commencing on November 25, 2023 to, but excluding, November 25, 2028, and the dividend rate applicable to the Preferred Shares Series 45 for the 3-month period commencing on November 25, 2023 to, but excluding, February 25, 2024, will be determined and announced by way of a news release on October 26, 2023. The Bank will also give written notice of these dividend rates to the registered holders of Preferred Shares Series 44.

Beneficial owners of Preferred Shares Series 44 who, on or after October 25, 2023, wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (ET) on November 10, 2023.

Conversion inquiries should be directed to BMO’s Registrar and Transfer Agent, Computershare Trust Company of Canada, at 1-800-340-5021

BMO.PR.E was issued as a FixedReset, 4.85%+268, that commenced trading 2018-9-17 after being announced 2018-09-06. It is tracked by HIMIPref™ and is assigned to the FixedReset (Discount) subindex.

National Bank of Canada has announced:

Further to its announcement of September 20, 2023, National Bank of Canada (the “Bank”) (TSX: NA) announced today the dividend rates applicable to the Non-Cumulative 5‑Year Rate Reset First Preferred Shares, Series 42 Non-Viability Contingent Capital (NVCC) (the “Series 42 Shares”) and the Non-Cumulative Floating Rate First Preferred Shares, Series 43 (NVCC) (the “Series 43 Shares”).

Holders of Series 42 Shares, should any remain outstanding after November 15, 2023, will be entitled to receive fixed-rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of the Bank and subject to the provisions of the Bank Act (Canada). The dividend rate for the five-year period commencing on November 16, 2023, and ending on November 15, 2028, will be 7.056%, being equal to the sum of the five-year Government of Canada Bond yield (4.286%) plus 2.77%, as determined in accordance with the terms of the Series 42 Shares.
Holders of Series 43 Shares, should any be issued on November 15, 2023, will be entitled to receive floating rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of the Bank and subject to the provisions of the Bank Act (Canada). The dividend rate for the three-month period commencing on November 16, 2023, and ending on February 15, 2024, will be 7.93%, being equal to the sum of the 90-day Government of Canada Treasury Bill yield (5.16%) plus 2.77%, calculated on the basis of actual number of days elapsed in such quarterly floating rate period divided by 365, as determined in accordance with the terms of the Series 43 Shares.

Holders of the Series 42 Shares have, subject to certain conditions, the right to convert all or part of their Series 42 Shares on a one-for-one basis into Series 43 Shares on November 15, 2023.

Beneficial owners of Series 42 shares who wish to exercise their conversion right should communicate as soon as possible with their broker or other nominee and ensure that they follow their instructions in order to meet the deadline to exercise such right, which is October 31, 2023, at 5:00 p.m. (EDT).

The September 20 press release referenced above stated:

National Bank of Canada (“National Bank”) (TSX: NA) announced today that it does not intend to exercise its right to redeem all or part of the currently outstanding 12,000,000 Series 42 Shares on November 15, 2023. As a result, subject to certain conditions, the holders of the Series 42 Shares will have the right to convert all or part of their Series 42 Shares on a one-for-one basis into Non-Cumulative Floating Rate First Preferred Shares, Series 43 (NVCC) (the “Series 43 Shares”) on November 15, 2023, in accordance with the terms of the Series 42 Shares described in the prospectus supplement dated June 4, 2018.

Holders who do not exercise their right to convert their Series 42 Shares into Series 43 Shares on November 15, 2023, will retain their Series 42 Shares.

The foregoing conversions are subject to the conditions that:

i. if National Bank determines that there would remain outstanding on November 15, 2023, less than 1,000,000 Series 43 Shares, after having taken into account all Series 42 Shares tendered for conversion into Series 43 Shares, then holders of Series 42 Shares will not be entitled to convert their shares into Series 43 Shares, and

ii. alternatively, if National Bank determines that there would remain outstanding on November 15, 2023, less than 1,000,000 Series 42 Shares, after having taken into account all Series 42 Shares tendered for conversion into Series 43 Shares, then all remaining Series 42 Shares will automatically be converted into Series 43 Shares without the consent of the holders on November 15, 2023.

In either case, National Bank shall give a notice to that effect to all registered holders of Series 42 Shares no later than November 8, 2023.

On October 17, 2023, National Bank will give notice of:

i. the annual fixed dividend rate applicable to the Series 42 Shares to which a holder of Series 42 Shares will be entitled for the 5-year period from November 16, 2023, up to and including November 15, 2028; and

ii. the floating quarterly dividend rate applicable to the Series 43 Shares to which a holder of Series 43 Shares will be entitled for the 3-month period from November 16, 2023, up to and including February 15, 2024.

Beneficial owners of Series 42 Shares who wish to exercise their conversion right should communicate with their broker or other nominee to obtain instructions for exercising such right during the conversion period, which will run from October 16, 2023, until October 31, 2023, at 5:00 p.m. (EDT).

NA.PR.G was issued as a FixedReset, 4.95%+277, NVCC compliant, that commenced trading 2018-6-11 after being announced 2018-05-31. It is tracked by HIMIPref™ and is assigned to the FixedResets (Discount) subindex.

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