RY.PR.H : Stealth Greenshoe

RY.PR.H, which closed on April 29, appears to have had some of its underwriters’ greenshoe exercised.

According to the prospectus:

The underwriters have been granted an option (the “Option”) to purchase up to an additional 2,000,000 Series AH Preferred Shares (the “Option Shares”) at the offering price exercisable at any time up to 48 hours prior to closing of the offering. This prospectus qualifies both the grant of the Option and the distribution of the Option Shares that will be issued if the Option is exercised. If the underwriters purchase all such Option Shares, the price to the public, the underwriters’ fee and net proceeds to the Bank will be $250,000,0000, $7,500,000 and $242,500,000, respectively, assuming no Series AH Preferred Shares are sold to the institutions referred to in Note (2) below. See “Plan of Distribution”.

According to the TSX, there are now 8.5-million shares outstanding, which implies that 500,000 shares were taken up on a greenshoe.

I am unable to find any issuer disclosure of this, either on the RBC Press Release page or on SEDAR.

2 Responses to “RY.PR.H : Stealth Greenshoe”

  1. madequota says:

    Is it possible that RBC themselves crossed 500K to one of their funds, subsidiaries, etc. . . . possibly at a discount to issue price? Could a transaction like that be done without disclosure?

    What do you think about this one? — >


    Royal Bank of Canada files final prospectus for issuance of Tier 1 capital
    TORONTO, April 23 /CNW/ – Royal Bank of Canada (RY on TSX and NYSE) today
    announced that it has filed a final prospectus with securities commissions
    across Canada for the issuance of Innovative Tier 1 capital of the bank.
    RBC Capital Trust, a subsidiary of Royal Bank of Canada, will issue
    $500 million of RBC TruCS – Series 2008-1.
    The RBC TruCS – Series 2008-1 will be priced at $1,000 each and will
    provide an indicated yield of 6.821%, paid semi-annually in an amount of
    $34.105 per RBC TruCS – Series 2008-1 on the last day of June and December.
    The initial payment on June 30, 2008 will be $11.773.
    RBC Capital Trust is a closed-end trust established under the laws of
    Ontario. RBC Capital Markets acted as lead agent on the issue.
    The capital will be issued for general corporate purposes.

  2. jiHymas says:

    The Innovative Tier 1 Capital issue has been already discussed.

    With respect to the disposition of the 500,000 shares greenshoed … I simply don’t know about the details. Presumably, IF it was RBCDS exercising the option and IF it was another RBC-controlled entity buying, the transaction would still have to be crossed on the exchange.

    It should also be noted that Portfolio Managers are required to act in the exclusive interest of their clients and – in my opinion, anyway – it would be highly improper for a bank executive even to discuss the possibility with the PM. Mind you, National Bank has shown (during the ABCP fiasco, August 20) that they, anyway, are not as punctilious as might be desired in respecting the boundary.

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