The National Bank of Canada has announced:
its intention to redeem on November 15, 2015, all of its issued and outstanding Non-Cumulative Fixed Rate First Preferred Shares Series 20 (the “Preferred Shares Series 20”) for total redemption price of approximately $176 million.
Pursuant to the share conditions, on November 15, 2015, the Bank may redeem the Preferred Shares Series 20 at a price equal to $25.50 per share together with all declared and unpaid dividends.
Separately from the payment of the redemption price, the declared quarterly dividend of $0.375, payable on November 15, 2015, will be paid in the usual manner to shareholders of record on October 13, 2015.
Since November 15, 2015 is a non-business day, any payments due to shareholders on such date will be made on the first business day following such date, being Monday, November 16, 2015.
A formal notice will be issued to holders of the Preferred Shares Series 20 in accordance with the share conditions. The redemption is subject to the final approval of the Office of the Superintendent of Financial Institutions (OSFI).
The Bank recommends shareholders consult with their tax advisors to determine the appropriate treatment and impact of the redemption.
Since the redemption is being priced at a premium to par, the Deemed Dividend rules come into account for taxable shareholders. Shareholders who allow their shares to be redeemed will be taxed as if they had sold it for $25.00 and simultaneously received a dividend of $0.50; shareholders who sell on the market (at a price which, unless something goes terribly wrong, should be a few pennies under the total redemption value, which will include the final actual dividend until that goes ex) will be taxed normally. The most favourable course will depend on the investors personal tax situation; please consult your personal tax advisor.
This entry was posted on Wednesday, August 26th, 2015 at 5:39 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
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NA.PR.M To Be Redeemed
The National Bank of Canada has announced:
Since the redemption is being priced at a premium to par, the Deemed Dividend rules come into account for taxable shareholders. Shareholders who allow their shares to be redeemed will be taxed as if they had sold it for $25.00 and simultaneously received a dividend of $0.50; shareholders who sell on the market (at a price which, unless something goes terribly wrong, should be a few pennies under the total redemption value, which will include the final actual dividend until that goes ex) will be taxed normally. The most favourable course will depend on the investors personal tax situation; please consult your personal tax advisor.
This entry was posted on Wednesday, August 26th, 2015 at 5:39 pm and is filed under Issue Comments. 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.