NA.PR.N To Be Redeemed

National Bank of Canada has announced:

its intention to redeem all of its remaining issued and outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares Series 21 (the “Preferred Shares Series 21”), on August 16, 2013, being, pursuant to the share conditions, the first date the Bank may, at its option, redeem the Preferred Shares Series 21 at a price equal to $25.00 per share, together with all declared and unpaid dividends.

Formal notice will be issued toshareholders in accordance with the share conditions. The redemption of the Preferred Shares Series 21 is subject to the approval of the Office of the Superintendent of Financial Institutions and is part of the Bank’s ongoing management of its regulatory capital.

NA.PR.N was one of the first FixedResets brought to market and has a now irrelevant Issue Reset Spread of +205bp. There are less than 3.5-million shares outstanding, as a tender offer in 2011 attracted more than half the float.

NA.PR.N is tracked by HIMIPref™ and is a member of the FixedReset sub-index.

3 Responses to “NA.PR.N To Be Redeemed”

  1. drap1 says:

    interesting decision by na given the level at which na recently issued their series q and the decision of bns to reset its issue at +205….farewell

  2. prefQC says:

    I don’t understand why three days before the redemption (Aug 13), the shares are trading at $24.97. Since all “unpaid dividends” should be paid upon redemption (approx 16 cents per share since last ex-dividend), it seems to me that buying 400 shares today would give an easy (0.16+0.03)x400 = $76 profit (less purchase commission) over 3 days. What am I missing? Why are people not going for this “free” money?

  3. jiHymas says:

    It’s the pay date that counts, not the ex-date.

    Consider the prospectus:

    The initial dividend, if declared, will be payable on November 15, 2008 and will be $0.55959 per share, based on the anticipated closing date of June 17, 2008.

    Work it out and you will find that the amount paid corresponds to the issue-date-to-pay-date term, ex-Date has nothing to do with it.

    The prospectus is available on SEDAR dated 2008-6-10

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