TD.PR.Q Enters Market With Assurance

TD.PR.Q, which was announced shortly after BNS.PR.O was announced, commenced trading today and fears of a debacle were not realized. It traded 433,512 shares to close at 25.11-14, 6×19.

The greenshoe was fully exercised:

The Toronto-Dominion Bank (“TD”) today announced that a group of underwriters led by TD Securities Inc. has exercised the option to purchase an additional 2 million Non-cumulative Class A First
Preferred Shares, Series Q (the “Series Q Shares”) carrying a face value of $25.00 per share. This brings the total issue announced on January 22, 2008, and expected to close January 31, 2008, to 8 million shares and gross proceeds raised under the offering to $200 million.
    The Series Q Shares will yield 5.60% per cent annually and are redeemable by TD for cash, subject to regulatory consent, at a declining premium after approximately five years. TD has filed in Canada a prospectus supplement to its January 11, 2007 base shelf prospectus in respect of this issue.

More Later.

Later, More: Curve price at the close 2008-1-31 was 25.23.

5 Responses to “TD.PR.Q Enters Market With Assurance”

  1. […] PrefBlog Canadian Preferred Shares – Data and Discussion « TD.PR.Q Enters Market With Assurance […]

  2. Kaitas21 says:

    I was reading about how over-allotment is used to stabilize the prize of the issue. When is over-allotment exercised ? And how does it affect the issue price when on trading day, the price is 1) below issue price 2) above issue price. I also read somewhere that the exercise of over-allotment is used to cover ‘short’ positions if the issue trades above offering price. Can you shed some light ?

  3. jiHymas says:

    Can you provide a link or reference to what you were reading?

    Over-allotment will be exercised whenever the underwriters can make some money by doing so. This could happen if the price rises above the issue price – or even if it doesn’t, as sometimes the commission will be high enough to make a small loss worthwhile.

    It helps to stabilize the market by providing some wiggle room in the amount of securities offered. The size of this issue was pegged at somewhere between 6-million and 8-million shares … if the market had hated this issue, and the underwriters had only been able to sell, say, 4-million shares, the greenshoe would not have been exercised and the overhang left sitting on the dealers’ books would be only 2-million shares.

    I will say, however, that I am not an expert on underwriting, so you may wish to keep asking!

  4. […] You don’t need to look far for a comparable! The issue is virtually identical to the recent TD.PR.Q issue, which differs only in a three month shift in the redemption schedule. TD.PR.Q closed 2008-2-29 at 25.59-65. […]

  5. […] this isn’t a particularly good example, because TD.PR.Q has been trading for less than a month. Having missed the market bottom, it is not surprising that its trading range is significantly less […]

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