PrefBlog

Royal Bank of Canada has announced (on April 9):

that it does not intend to exercise its right to redeem all or any part of the currently outstanding Non-Viability Contingent Capital (NVCC) Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series BD (the “Series BD shares”) on May 24, 2020. There are currently 24,000,000 Series BD shares outstanding.

Subject to certain conditions set out in the prospectus supplement dated January 27, 2015 relating to the issuance of the Series BD shares, the holders of the Series BD shares have the right to convert all or part of their Series BD shares, on a one-for-one basis, into NVCC Non-Cumulative Floating Rate First Preferred Shares Series BE (the “Series BE shares”) on May 24, 2020. On such date, holders who do not exercise their right to convert their Series BD shares into Series BE shares will continue to hold their Series BD shares. The conversion will occur on May 25 being the first business day following the conversion date of May 24 as identified in the prospectus, which falls on a Sunday. The foregoing conversion rights are subject to the following:

if Royal Bank of Canada determines that there would be less than 1,000,000 Series BE shares outstanding after taking into account all shares tendered for conversion on May 24, 2020, then holders of Series BD shares will not be entitled to convert their shares into Series BE shares, and
alternatively, if Royal Bank of Canada determines that there would remain outstanding less than 1,000,000 Series BD shares after May 24, 2020, then all remaining Series BD shares will automatically be converted into Series BE shares on a one-for-one basis on May 24, 2020.
In either case, Royal Bank of Canada will give written notice to that effect to holders of Series BD shares no later than May 17, 2020.

The dividend rate applicable for the Series BD shares for the 5-year period from and including May 24, 2020 to, but excluding, May 24, 2025, and the dividend rate applicable to the Series BE shares for the 3-month period from and including May 24, 2020 to, but excluding, August 24, 2020, will be determined and announced by way of a press release on April 24, 2020.

Beneficial owners of Series BD shares who wish to exercise their conversion rights should instruct their broker or other nominee to exercise such rights during the conversion period, which runs from April 24, 2020 until 5:00 p.m. (EST) on May 11, 2020.

Inquiries should be directed to Shareholder Relations Officer, Shirley Boudreau, at 416-955-7806.

I will have more to say when the reset rate is announced April 24.

This entry was posted on Sunday, April 19th, 2020 at 3:18 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.