From my Tier 1 Capital notes:
It is also interesting that Royal has used up about half its available room. Given that their Tier 1 Ratio at year-end significantly lagged the competition, I suspect that there will be more opportunistic issuances in addition to RY.PR.D and RY.PR.E.
It’s always gratifying to have one’s predictions justified!
Royal Bank of Canada (RY on TSX and NYSE) today announced a domestic public offering of $200 million of Non-Cumulative First Preferred Shares Series AF.
The bank will issue 8 million Preferred Shares priced at $25 per share and holders will be entitled to receive non-cumulative preferential quarterly dividends in the amount of $0.278125 per share, to yield 4.45 per cent annually. The bank has granted the Underwriters an option, exercisable in whole or in part, to purchase up to an additional 2 million Preferred Shares at the same offering price.
So … 8-million shares @$25.00, a $200-million issue and the potential for $50-million more if the underwriters exercise their options. Pays 4.45% = $1.1125 annually, first dividend August 24 of $0.496815 based on a March 14 closing.
| RY Pr Ser AF Redemption Schedule | ||
| From | To | Price |
| 2012-5-24 | 2013-5-23 | $26.00 |
| 2013-5-24 | 2014-5-23 | 25.75 |
| 2014-5-24 | 2015-5-23 | 25.50 |
| 2015-5-24 | 2016-5-23 | 25.25 |
| 2016-5-24 | INFINITE DATE | 25.00 |
The issue is provisionally rated Pfd-1 by DBRS and P-1(low) by S&P.
It’s a bought deal, expected to close 2007-3-14.
More later.
Later, more
| Royal Bank 4.45% Perp New Issue & Comparatives | |||
| Data | RY.PR.? | RY.PR.A | RY.PR.E |
| Price due to base-rate | 22.72 | 22.69 | 23.01 |
| Price due to short-term | -0.36 | -0.36 | -0.36 |
| Price due to long-term | 1.27 | 1.27 | 1.28 |
| Price to to Cumulative Dividends | 0.00 | 0.00 | 0.00 |
| Price due to Liquidity | 1.67 | 1.67 | 1.68 |
| Price due to error | -0.04 | -0.04 | -0.04 |
| Curve Price (Taxable Curve) | 25.27 | 25.23 | 25.57 |
| Dividend Rate | $1.1125 | $1.1125 | %1.125 |
| Quote 3/5 | 25.00 Issue |
24.89-98 | 25.05-16 |
| YTW (after tax) | 3.55% | 3.57% | 3.61% |
| YTW Date | 2016-06-23 / Infinite | Infinite | 2037-03-05 |
| Credit Rating (DBRS) | Pfd-1 | Pfd-1 | Pfd-1 |
| YTW (Pre-Tax) | 4.46% | 4.49% | 4.55% |
| YTW Modified Duration (Pre-Tax) | 7.60 | 16.43 | 16.30 |
| YTW Pseudo-Convexity (Pre-Tax) | -68.1 | -37.5 | -59.4 |
[…] The issuers and their salesmen must be trying to extract every dollar from this market since the new Royal Bank issue announced nine days ago staggered to market, trading 395,889 shares and closing at $24.75-80, 73×29. It opened at $24.90, the high for the day. […]
[…] Update: See also previous post for RY.PR.F. […]