Issue: HSBC Bank Canada Non-Cumulative 5-Year Rate Reset Class 1 Preferred Shares Series E
Size: 5-million shares (=$125-million) + greenshoe 3-million shares (=$75-million)
Dividends: $1.65 p.a. (=6.60%); reset every Exchange Date to 5-Year GOC + 485bp. First dividend payable 2009-6-30 for $0.4125 based on Closing Date.
Closing Date: 2009-3-31
Exchange Dates: 2014-6-30 and every five years thereafter
Exchange: To and from Series F (“Floaters”), which pay 90-day bills + 485bp, reset quarterly
Redemption: Every Exchange Date at $25.00. Floaters are also redeemable at $25.50 at any other valid time; it is not clear to me whether they may be redeemed in the period 2014-6-30 to 2019-6-30:
The Series F Preferred Shares will not be redeemable prior to June 30, 2019.
…
$25.50 in the case of redemptions on any other date on or after June 30, 2014 …
Update: Press Release. I am advised that the issue size has been bumped to 7-million shares + 3-million greenshoe.
Update: Press release on size increase
Update, 2009-4-10: Greenshoe exercised in full, issue size 10-million shares = $250-million.
The wording appears to change the Call option from a European type to an American style option after June 30, 2014. That certainly increases the value of the Call option!
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