PrefBlog

National Bank has announced:

that it has entered into an agreement with a group of underwriters led by National Bank Financial Inc. for an issue on a bought deal basis of 5 million non-cumulative 5-year rate reset first preferred shares series 24 (the “Series 24 Preferred Shares”), at a price of $25.00 per share, to raise gross proceeds of $125 million.

National Bank has also granted the underwriters an option to purchase, on the same terms, up to an additional 3 million Series 24 Preferred Shares. This option is exercisable in whole or in part by the underwriters at any time up to two business days prior to closing. The maximum gross proceeds raised under the offering will be $200 million should this option be exercised in full.

The Series 24 Preferred Shares will yield 6.60% annually, payable quarterly, as and when declared by the Board of Directors of National Bank, for the initial period ending February 15, 2014. The first of such dividends, if declared, shall be payable on May 15, 2009. Thereafter, the dividend rate will reset every five years at a level of 463 basis points over the then 5-year Government of Canada bond yield.

Holders of the Series 24 Preferred Shares will have the right to convert their shares into an equal number of non-cumulative floating rate first preferred shares series 25 (the “Series 25 Preferred Shares”), subject to certain conditions, on February 15, 2014, and on February 15th every five years thereafter. Holders of the Series 25 Preferred Shares will be entitled to receive quarterly floating dividends, as and when declared by the Board of Directors of National Bank, equal to the 90-day Government of Canada Treasury Bill rate plus 463 basis points.

The net proceeds of the offering will be used for general corporate purposes and are expected to qualify as Tier 1 capital for National Bank. The expected closing date is on or about January 14, 2009. National Bank intends to file in Canada a prospectus supplement to its December 5, 2008 base shelf prospectus in respect of this issue.

National Bank will make an application to list the Series 24 Preferred Shares and the Series 25 Preferred Shares as of the closing date on the Toronto Stock Exchange.

This entry was posted on Monday, January 5th, 2009 at 3:36 pm and is filed under New Issues. 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.