TD.PF.K To Be Redeemed

The Toronto-Dominion Bank has announced:

that it will exercise its right to redeem all of its 16,000,000 outstanding Non-Cumulative 5-Year Rate Reset Class A First Preferred Shares, Series 20 (Non-Viability Contingent Capital) (the “Series 20 Shares”) on October 31, 2023 at the price of $25.00 per Series 20 Share for an aggregate total of approximately $400 million. The redemption has been approved by the Office of the Superintendent of Financial Institutions.

On August 24, 2023, TD announced that dividends of $0.296875 per Series 20 Share had been declared. These will be the final dividends on the Series 20 Shares, and will be paid in the usual manner on October 31, 2023 to shareholders of record on October 6, 2023, as previously announced. After October 31, 2023, the Series 20 Shares will cease to be entitled to dividends and the only remaining rights of holders of such shares will be to receive payment of the redemption amount.

Beneficial holders who are not directly the registered holder of Series 20 Shares should contact the financial institution, broker or other intermediary through which they hold these shares to confirm how they will receive their redemption proceeds. Inquiries should be directed to our Registrar and Transfer Agent, TSX Trust Company, at 1-800-387-0825 (or in Toronto 416-682-3860).

TD.PF.K was issued as a FixedReset, 4.75%+259 that commenced trading 2018-9-13 after being announced 2018-9-4. It is tracked by HIMIPref™ and is assigned to the FixedReset (Discount) subindex.

The redemption comes as quite a surprise, given that the closing price on 2023-9-22 was 21.79 with most VWAPs for September being below 22.00. It has been clear for a while that TD has been awash in excess capital since the Horizons deal was abandoned; in addition, OSFI has been twisting bank arms to get them to issue LRCNs and OTC preferreds. Still, I would have liked to have been a fly on the wall at the meeting where this redemption was approved by the bank!

Thanks to Assiduous Reader CanSiamCyp for bringing this to my attention!

14 Responses to “TD.PF.K To Be Redeemed”

  1. fsabbagh says:

    Very nice day for perferred shares. I had noticed my bids were not being filled last week where as in prior weeks, one or two of my bids would be filled. This may be the turn around point for preferreds. Wishful thinking?

    Tried to bid on some bank preferreds today but none are filling. Might just need to bid at market (with a limit, of course).

  2. Habsfan says:

    Agree with you fsabbagh, I typically brace myself before I glance at my pref portfolio, with one hand on the keyboard the other on the anti-depressants. Today was a beautiful sight. Good for you for continuing to put in bids. I have been feeling like a hero in recent months just for hanging on. Do you think this is mostly about TD redeeming PF.K? Hope it continues.

  3. fsabbagh says:

    Yes I think it’s mostly the TD redemption that has investors starting to look at the preferreds. Hope it keeps up.

  4. […] Canadian Preferred Shares: Data and Discussion « TD.PF.K To Be Redeemed […]

  5. stusclues says:

    “Yes I think it’s mostly the TD redemption that has investors starting to look at the preferreds. Hope it keeps up.”

    This may or may not be the catalyst that sends FR spreads into freefall but something will be, eventually. Just like sellers sold because sellers sold, buyers will buy because buyers are buying.

  6. Uub says:

    Mostly the bank prefs and reset issues within ~1yr got the pop. Everything else was flat/bled as usual.

  7. peet says:

    Uub: “Everything else was flat/bled as usual.”

    Nonsense. Why do you post something like this? I track a large sample of prefs and I could list nice pops today for resets in late 2024, 2025 etc. but why bother …

  8. Habsfan says:

    Thanks for the comments everybody. Nice to have others to talk to. Being a pref investor is a lot like being a Chicago Bears fan, they’re scarce and they’re quiet.

  9. paradon says:

    I track all of the prefs daily and the advance:decline ratio was like 8:1 yesterday.

  10. CaddilacMan says:

    Thanks for the laugh Habsfan. How bad are the Bears this season? They are 2 point underdogs to the visiting Denver Broncos this Sunday. Denver gave up a mere 70(!) points in their previous game, nearly breaking a 60 year-old record for defensive futility, and are 0-3.

  11. […] surprisingly high at 10% in September, saved from ignominy by a burst of activity following the surprise redemption of TD.PF.K and subsequent market […]

  12. […] TXPR price index closed at 505.06 today, just a hair above the September 22, pre-TD.PF.K-redemption, level of 505.05. Easy come, easy go! The Total Return Index Value (TRIV) for the index was up 62bp […]

  13. […] Other markets were calm. The day’s rise might have been due to reinvestment of the TD.PF.K redemption money. […]

  14. […] exploded to 24% in October, fuelled by market action following the September announcement of the surprise redemption of TD.PF.K, reinforced by a seeiming overall view that interest rates were on the rise (although I remain […]

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