PrefBlog

TD has announced:

that TD Capital Trust III, a subsidiary of TDBFG, and TDBFG have filed a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada with respect to a proposed public offering of TD Capital Trust III Securities – Series 2008 (“TD CaTS III”). TDBFG anticipates the issuance of TD CaTS III to constitute Tier 1 Capital of TDBFG.

The preliminary prospectus (available on SEDAR) states:

The Initial Trust Assets will consist primarily of Co-Ownership Interests acquired by the Trust under the Sales, Pooling and Servicing Agreements and the Purchase Agreements (each as defined herein). The Trust Assets may consist of Residential Mortgages, Co-Ownership Interests, Mortgage-Backed Securities, Eligible Investments (each as defined herein) and contractual rights in respect of the activities and operations of the Trust (the “Eligible Trust Assets”).

Issue size and coupon has not yet been disclosed.

As with the National Bank issue:

So it’s ASSET-BACKED, not loan backed. This issue simply goes further to show that cumulative coupons to enable the issuance of Loan Based Tier 1 paper are not necessary; OSFI should rescind its ill-advised draft advisory, which rescues the loan-backed structure at the expense of non-cumulativity.

I have made OSFI aware of my views on this matter.

This entry was posted on Tuesday, September 2nd, 2008 at 12:37 pm and is filed under Regulation. 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.