PrefBlog

BNS has announced another issue, similar in structure to their March issuance.

Issue Name: Non-cumulative 5-Year Rate Reset Preferred Shares Series 20

Amount: 12-million shares @ $25 = $300-million

Greenshoe: 2-million shares (= $50-million) up to 48 hours before closing

Initial Rate: 5.00%, quarterly, until 2013-10-25 pay-date.

Reset: Resets every five years to 5-Year Canadas + 170bp, determined 30 days prior to the first day of a reset period.

Exchange: Exchangeable on every reset date to Series 21 (the Floaters), which pays 90-day bills + 170bp

Redemption: Redeemable every Exchange Date at $25.00. Floaters are redeemable every Exchange Date at 25.00 and at $25.50 at all other times.

Priority: Parri Passu with all other preferreds, senior to common, junior to everything else.

Ratings: S&P: P-1(low); DBRS: Pfd-1; Moody’s: Aa3

None for me thanks! I’ve commented on this structure previously and don’t like the fact that I’m expected to take perpetual credit risk for 5-year rates. It’s just another attempt to finance long with pretend-short-term paper … which was a major contributing factor to the Credit Crunch. However … some people like ’em!

Update: Oops! Forgot the closing! As noted on Scotia’s Press Release:

The Bank has agreed to sell the Preferred Shares Series 20 to a syndicate of underwriters led by Scotia Capital Inc. on a bought deal basis. The Bank has granted to the underwriters an option to purchase up to an additional $50 million of the Preferred Shares Series 20 at any time up to 48 hours before closing.
Closing is expected to occur on or after June 10, 2008. This domestic public offering is part of Scotiabank’s ongoing and proactive management of its Tier 1 capital structure.

This entry was posted on Tuesday, May 27th, 2008 at 3:01 pm and is filed under New Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.