{"id":6442,"date":"2009-05-06T12:58:18","date_gmt":"2009-05-06T16:58:18","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=6442"},"modified":"2009-05-06T12:58:18","modified_gmt":"2009-05-06T16:58:18","slug":"bns-tier-1-issue-7802705","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=6442","title":{"rendered":"BNS Tier 1 Issue: 7.802%+705"},"content":{"rendered":"

I mentioned on May 1<\/a>:<\/p>\n

I understand that Scotia has done an Innovative Tier 1 Capital deal, described as \u201c650 million deal June 30, 2019-2108 \u2026 at 7.804%\u201d, but have no further details, no press release, nothing on SEDAR.<\/p><\/blockquote>\n

Well, still no press release, but the prospectus is on SEDAR<\/a>, dated May 1, 2009:<\/p>\n

From the date of issue to, but excluding, June 30, 2019 the interest rate on the Scotia BaTS III Series 2009-1 will be fixed at 7.802% per annum. Starting on June 30, 2019 and on every fifth anniversary of such date thereafter until June 30, 2104 (each such date, an \u201cInterest Reset Date\u201d), the interest rate on the Scotia BaTS III Series 2009-1 will be reset at an interest rate per annum equal to the Government of Canada Yield (as defined herein) plus 7.05%. The Scotia BaTS III Series 2009-1 will mature on June 30, 2108. Holders of Scotia BaTS III Series 2009-1 may, in certain circumstances, be required to invest interest paid on the Scotia BaTS III Series 2009-1 in a series of newly-issued preferred shares of the Bank with non-cumulative dividends (each such series is referred to as \u201cBank Deferral Preferred Shares). See \u201cDescription of the Trust Securities \u2014 Scotia BaTS III Series 2009-1 \u2014 Deferral Right\u201d.
…<\/b>
The Bank will covenant for the benefit of holders of Scotia BaTS III Series 2009-1 (the \u201cDividend Stopper Undertaking\u201d) that, in the event of an Other Deferral Event (as defined herein), the Bank will not declare dividends of any kind on any preferred shares of the Bank (\u201cBank Preferred Shares\u201d) or, failing any Bank Preferred Shares being outstanding, on all of the outstanding common shares of the Bank (\u201cBank Common Shares\u201d and, collectively with the Bank Preferred Shares, the \u201cDividend Restricted Shares\u201d) until the 6th month (the \u201cDividend Declaration Resumption Month\u201d) following the relevant Deferral Date (as defined herein).
…<\/b>
On or after June 30, 2014 the Trust may, at its option, with the prior approval of the Superintendent, on giving not more than 60 nor less than 30 days\u2019 notice to the holders of the Scotia BaTS III Series 2009-1, redeem the Scotia BaTS III Series 2009-1, in whole or in part. The redemption price per $1,000 principal amount of Scotia BaTS III Series 2009-1 redeemed on any day that is not an Interest Reset Date will be equal to the greater of par and the Canada Yield Price, and the redemption price per $1,000 principal amount of Scotia BaTS III Series 2009-1 redeemed on any Interest Reset Date will be par, together in either case with accrued and unpaid interest to but excluding the date fixed for redemption, subject to any applicable withholding tax. The redemption price payable by the Trust will be paid in cash.
…<\/b>
It is expected that the closing date will be on or about May 7, 2009 (the \u201cClosing Date\u201d)
…<\/b>
On or after June 30, 2014 the Trust may, at its option, with the prior approval of the Superintendent, on giving not more than 60 nor less than 30 days\u2019 notice to the holders of the Scotia BaTS III Series 2009-1, redeem the Scotia BaTS III Series 2009-1, in whole or in part. The redemption price per $1,000 principal amount of Scotia BaTS III Series 2009-1 redeemed on any day that is not an Interest Reset Date will be equal to the greater of par and the Canada Yield Price, and the redemption price per $1,000 principal amount of Scotia BaTS III Series 2009-1 redeemed on any Interest Reset Date will be par, together in either case with accrued and unpaid interest to but excluding the date fixed for redemption.
…<\/b>
Canada Yield Price means the price per $1,000 principal amount of Scotia BaTS III Series 2009-1 calculated by the Bank to provide an annual yield thereon from the applicable date of redemption to, but excluding, the next Interest Reset Date equal to the GOC Redemption Yield plus (i) 1.17% if the redemption date is any time prior to June 30, 2019 or (ii) 2.35% if the redemption date is any time on or after June 30, 2019.
…<\/b>
GOC Redemption Yield means, on any date, the average of the annual yields at 12:00 p.m. (Eastern time) on the Business Day immediately preceding the date on which the Trust gives notice of the redemption of the Scotia BaTS III Series 2009-1 as determined by two Canadian registered investment dealers, each of which will be selected by, and must be independent of, the Bank, as being the annual yield from the applicable date of redemption to, but excluding, the next Interest Reset Date which a non-callable Government of Canada bond would carry, assuming semi-annual compounding, if issued in Canadian dollars at 100% of its principal amount on the date of redemption and maturing on the next Interest Reset Date.
…<\/b>
Government of Canada Yield means, on any Interest Reset Date, the average of the annual yields as at 12:00 p.m. (Eastern time) on the third Business Day prior to the applicable Interest Reset Date as determined by two Canadian registered investment dealers, each of which will be selected by, and must be independent of, the Bank, as being the annual yield to maturity on such date which a non-callable Government of Canada bond would carry, assuming semiannual compounding, if issued in Canadian dollars in Canada at 100% of its principal amount on such date with a term to maturity of five years.
…<\/b>
Interest Reset Date means June 30, 2019 and every fifth anniversary of such date thereafter until June 30, 2104 on which dates the interest rate on the Scotia BaTS III Series 2009-1 will be reset as described in this prospectus.<\/p><\/blockquote>\n

There hasn’t been a new BNS Fixed-Reset since January<\/a> and the market has changed a lot since then, so let’s do a quick comparison with the more recent RY.PR.Y 6.10%+413<\/a>:<\/p>\n