{"id":1895,"date":"2008-03-06T16:45:49","date_gmt":"2008-03-06T20:45:49","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=1895"},"modified":"2008-03-06T16:45:49","modified_gmt":"2008-03-06T20:45:49","slug":"new-issue-bns-perp-reset-rate","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=1895","title":{"rendered":"New Issue: BNS Perp – Reset Rate"},"content":{"rendered":"

Nice to see some high quality issuance of this kind of note. I have no idea whether it’s any good though! Press Release<\/a>:<\/p>\n

Scotiabank today announced a domestic public offering of 12 million, non-cumulative 5-year rate reset preferred shares Series 18 (the “Preferred Shares Series 18”) at a price of $25.00 per share, for an aggregate amount of $300 million.
\n\u00a0\u00a0\u00a0 Holders of Preferred Shares Series 18 will be entitled to receive a non-cumulative quarterly fixed dividend for the initial five-year period ending April 25, 2013 of 5.00% per annum, as and when declared by the Board of Directors of Scotiabank. Thereafter, the dividend rate will reset every five years at a level of 205 basis points over the 5-year Canada bond yield.
\nShareholders will, subject to certain conditions, have the option to convert all or any part of their shares to non-cumulative floating rate preferred shares Series 19 (the “Preferred Shares Series 19”) of Scotiabank. Holders of the Preferred Shares Series 19 will be entitled to receive a non-cumulative quarterly floating dividend equal to the 3-month Government of Canada Treasury Bill yield plus 205 basis points, as and when declared by the Board of Directors of Scotiabank.
\n\u00a0\u00a0\u00a0 The Bank has agreed to sell the Preferred Shares Series 18 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 18 at any time up to 30 days after closing.
\n\u00a0\u00a0\u00a0 Closing is expected to occur on or after March 25, 2008. This domestic public offering is part of Scotiabank’s ongoing and proactive management of its Tier 1 capital structure.<\/p><\/blockquote>\n

Update<\/strong>: I have some more details on this issue, including one provision that I consider critical: it’s redeemable at par on April 26, 2013 and every five years thereafter. I need to think about this a bit more, but my preliminary thoughts are:<\/p>\n