Canadian Western Bank has announced (on March 11):
that it does not intend to exercise its right to redeem all or any of its currently outstanding 5,000,000 non-cumulative 5-year rate reset First Preferred Shares Series 5 (the “Series 5 Preferred Shares”) (TSX: CWB.PR.B) on April 30, 2019. As a result, subject to certain conditions described in the prospectus supplement dated February 3, 2014 relating to the issuance of the Series 5 Preferred Shares (the “Prospectus”), the holders of the Series 5 Preferred Shares have the right, at their option, to convert any or all of their Series 5 Preferred Shares into an equal number of CWB’s non-cumulative floating rate First Preferred Shares Series 6 (the “Series 6 Preferred Shares”), subject to certain conditions, on April 30, 2019. In accordance with the share conditions, a formal notice of the right to convert Series 5 Preferred Shares into Series 6 Preferred Shares will be sent to the registered holders of the Series 5 Preferred Shares. Holders of Series 5 Preferred Shares are not required to elect to convert all or any part of their Series 5 Preferred Shares into Series 6 Preferred Shares. Holders who do not exercise their right to convert their Series 5 Preferred Shares into Series 6 Preferred Shares on April 30, 2019 will retain their Series 5 Preferred Shares, unless automatically converted in accordance with the conditions below.
The foregoing conversion right is subject to the conditions that: (i) if, after April 15, 2019, CWB determines that there would be less than 500,000 Series 6 Preferred Shares outstanding on April 30, 2019, then no Series 5 Preferred Shares will be converted into Series 6 Preferred Shares, and (ii) alternatively, if after, April 15, 2019, CWB determines that there would be less than 500,000 Series 5 Preferred Shares outstanding on April 30, 2019, then all remaining Series 5 Preferred Shares will automatically be converted into an equal number of Series 6 Preferred Shares on April 30, 2019. In either case, CWB will give written notice to that effect to any registered holders of Series 5 Preferred Shares affected by the preceding minimums on or before April 23, 2019.
The dividend rate applicable to the Series 5 Preferred Shares for the 5-year period commencing on May 1, 2019, and ending on and including April 30, 2024, and the dividend rate applicable to the Series 6 Preferred Shares for the 3-month period commencing on May 1, 2019, and ending on and including July 31, 2019, will be determined and announced by way of a news release on April 1, 2019. CWB will also give written notice of these dividend rates to the registered holders of Series 5 Preferred Shares.
Beneficial owners of Series 5 Preferred Shares who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (EDT) on April 15, 2019. Conversion inquiries should be directed to CWB’s Registrar and Transfer Agent, Computershare, at 1-800-564-6253.
Subject to certain conditions described in the Prospectus, CWB may redeem the Series 5 Preferred Shares, in whole or in part, on April 30, 2024 and on April 30 every five years thereafter and may redeem the Series 6 Preferred Shares, in whole or in part, after April 30, 2019.
The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 6 Preferred Shares effective upon conversion. Listing of the Series 6 Preferred Shares is subject to CWB fulfilling all the listing requirements of the TSX and, upon approval, the Series 6 Preferred Shares will be listed on the TSX under the trading symbol “CWB.PR.E”.
CWB.PR.B is a FixedReset, 4.40%+276, that commenced trading 2014-2-10 after being announced 2014-1-31. It is tracked by HIMIPref™ but relegated to the Scraps – FixedReset (Discount) index on credit concerns.
I will have more to say about the desirability of conversion when the reset rate is announced on April 1.
CWB to extend CWB.PR.B and CWB.PR.D, reset rate to be announced on April 1.
https://www.cwb.com/en/news/2024/cwb-announces-conversion-privilege-of-first-preferred-shares-series-5-and-series-9
[…] Thanks to Assiduous Reader niagara for bringing this to my attention! […]