{"id":1235,"date":"2007-09-25T12:10:29","date_gmt":"2007-09-25T16:10:29","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=1235"},"modified":"2007-09-25T12:10:29","modified_gmt":"2007-09-25T16:10:29","slug":"bns-new-issue-525-perpetual","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=1235","title":{"rendered":"BNS New Issue : 5.25% Perpetual"},"content":{"rendered":"

Scotia has announced<\/a>:<\/p>\n

\n

a domestic public offering of 12 million, 5.25% non-cumulative preferred shares Series 16 (the “Preferred Shares Series 16”) at a price of $25.00 per share, for an aggregate amount of $300 million.
\n\u00a0\u00a0\u00a0 The Bank has agreed to sell the Preferred Shares Series 16 to a syndicate of underwriters led by Scotia Capital Inc. on a bought deal basis. The Bank has granted to the underwriters an over allotment option to purchase up to an additional $45 million of the Preferred Shares Series 16 at any time up to 30 days after closing.
\n\u00a0\u00a0\u00a0 Closing is expected to occur on or after October 12, 2007. This domestic public offering is part of Scotiabank’s ongoing and proactive management of its Tier 1 capital structure.<\/p>\n<\/blockquote>\n

This will get the money into Tier 1 prior to Scotia’s year-end on October 31. I certainly don’t think Scotia’s in any trouble, but I suspect that all the banks will have seen their balance sheets bulk up over the past six weeks (as their sometime customers find it more difficult or too expensive to borrow on the money market) and who knows? We might even see some more issuance from those banks that have the room.<\/p>\n

Come on TD! Let’s see a good big batch of TD Perps!<\/p>\n

Anyway:<\/p>\n

Size: 12-million shares (= $300-million), underwriters’ option for additional 1.8-million shares (= $45-million)<\/p>\n

Issue Price: $25.00\u00a0<\/p>\n

Dividend: 5.25% = $1.3125 p.a.\u00a0\u00a0Paid on third-last business day of Jan, April, July, Oct. Long first dividend of $0.39195 anticipated, to be paid Jan 29.<\/p>\n

Redemption: Redeemable commencing third-last business day in January, 2013, at $26.00. Redemption price declines by $0.25 p.a. until January 27, 2017; redeemable at $25.00 thereafter.<\/p>\n

Seniority: On parity with all other preferred shares, senior to common, junior to everything else.<\/p>\n

On the whole, the issue looks pretty good and I suspect that it will trade at an immediate premium:<\/p>\n

\n\n\n\n\n\n\n\n\n
Comparables<\/td>\n<\/tr>\n
Issue<\/td>\nFair Value
\nEstimated
\nby HIMIPref\u2122<\/td>\n		Quote 9\/24<\/td>\n<\/tr>\n
BNS.PR.J<\/td>\n26.05<\/td>\n26.01-10<\/td>\n<\/tr>\n
BNS.PR.K<\/td>\n24.29<\/td>\n24.67-73<\/td>\n<\/tr>\n
BNS.PR.L<\/td>\n23.51<\/td>\n23.49-55<\/td>\n<\/tr>\n
BNS.PR.M<\/td>\n23.51<\/td>\n23.51-57<\/td>\n<\/tr>\n
Series 16<\/td>\n25.93<\/td>\nNot yet trading<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

The new issue has been added to the HIMIPref\u2122 database with the securityCode<\/a> P50013.<\/p>\n

Update, after close<\/strong>: What a difference a day makes! As briefly discussed in the September 25 Review<\/a>, the new issue appears to have been the cause (or at least the trigger!) for a mass repricing of perpetuals. A revised table of comparibles is:<\/p>\n

\n\n\n\n\n\n\n\n\n
Comparables<\/td>\n<\/tr>\n
Issue<\/td>\nFair Value
\nEstimated
\nby HIMIPref\u2122<\/td>\n		Quote 9\/25<\/td>\n<\/tr>\n
BNS.PR.J<\/td>\n25.40<\/td>\n25.41-60<\/td>\n<\/tr>\n
BNS.PR.K<\/td>\n24.03<\/td>\n24.09-20<\/td>\n<\/tr>\n
BNS.PR.L<\/td>\n23.10<\/td>\n23.03-24<\/td>\n<\/tr>\n
BNS.PR.M<\/td>\n23.10<\/td>\n22.85-90<\/td>\n<\/tr>\n
Series 16<\/td>\n25.45<\/td>\nNot yet trading<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

Update, 2007-10-10<\/strong>: As of the close today, fair value is estimated as $24.52.<\/p>\n

Update, 2007-10-11:<\/b> As of the close today, fair value is estimated at $24.43.\n<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Scotia has announced: a domestic public offering of 12 million, 5.25% non-cumulative preferred shares Series 16 (the “Preferred Shares Series 16”) at a price of $25.00 per share, for an aggregate amount of $300 million. …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33,17],"tags":[],"class_list":["post-1235","post","type-post","status-publish","format-standard","hentry","category-data-fixes","category-new-issues"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1235"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/1235\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}