The National Bank of Canada has announced:
that it has entered into an agreement with a group of underwriters led by National Bank Financial Inc. for an issue on a bought deal basis of 8 million Basel III-compliant non-cumulative 5-year rate reset first preferred shares series 30 (the “Series 30 Preferred Shares”), at a price of $25.00 per share, to raise gross proceeds of $200 million.
National Bank has also granted the underwriters an option to purchase, on the same terms, up to an additional 2 million Series 30 Preferred Shares. This option is exercisable in whole or in part by the underwriters at any time up to two business days prior to closing. The maximum gross proceeds raised under the offering will be $250 million should this option be exercised in full.
The Series 30 Preferred Shares will yield 4.10% annually, payable quarterly, as and when declared by the Board of Directors of National Bank, for the initial period ending May 15, 2019. The first of such dividends, if declared, shall be payable on May 15, 2014. Thereafter, the dividend rate will reset every five years at a level of 240 basis points over the then 5-year Government of Canada bond yield. Subject to regulatory approval, National Bank may redeem the Series 30 Preferred Shares in whole or in part at par on May 15, 2019 and on May 15 every five years thereafter.
Holders of the Series 30 Preferred Shares will have the right to convert their shares into an equal number of non-cumulative floating rate first preferred shares Series 31 (the “Series 31 Preferred Shares”), subject to certain conditions, on May 15, 2019, and on May 15 every five years thereafter. Holders of the Series 31 Preferred Shares will be entitled to receive quarterly floating dividends, as and when declared by the Board of Directors of National Bank, equal to the 90-day Government of Canada Treasury Bill rate plus 240 basis points.
The net proceeds of the offering will be used for general corporate purposes and are expected to qualify as Tier 1 capital for National Bank. The expected closing date is on or about February 7, 2014. National Bank intends to file in Canada a prospectus supplement to its October 5, 2012 base shelf prospectus in respect of this issue.
Looks like these things are selling like hotcakes (although how well hotcakes ever sold is a matter for conjecture)! The bank has issued another release:
as a result of strong investor demand for its previously announced domestic public offering of Non-cumulative 5-Year Rate Reset First Preferred Shares Series 30, the size of the offering has been increased to 14 million shares. The gross proceeds of the offering will now be $350 million. The offering will be underwritten by a syndicate led by National Bank Financial Inc. The expected closing date is February 7, 2014.
The net proceeds of the offering will be used for general corporate purposes and are expected to qualify as Tier 1 capital for National Bank.