National Bank of Canada announces Initial Take Up and Extension of Offers to Purchase Preferred Shares

MONTREAL, 11 April 2011 - 

National Bank of Canada (the “Bank”) (TSX: NA) made an announcement today regarding the Bank’s offers to purchase (the “Offers”) all of the issued and outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares Series 21 (the “Preferred Shares Series 21”), all of the issued and outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares Series 24 (the “Preferred Shares Series 24”), and all of the issued and outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares Series 26 (the “Preferred Shares Series 26”, and together with the Preferred Shares Series 21 and the Preferred Shares Series 24, the “Preferred Shares”).

The Bank announced that all of the Preferred Shares validly deposited under the Offers and not withdrawn as of April 11, 2011 have been taken up and accepted for payment by the Bank. As a result, the Bank has taken up 4,372,089 Preferred Shares Series 21, 4,162,483 Preferred Shares Series 24 and 3,629,923 Preferred Shares Series 26 under the Offers for an aggregate consideration of $335,636,846.27.

The Preferred Shares taken up under the Offers represent approximately (i) 54.31% of the outstanding Preferred Shares Series 21, (ii) 61.21% of the outstanding Preferred Shares Series 24, and (iii) 62.58% of the outstanding Preferred Shares Series 26.

The Bank also announced that it is extending the expiry date of the Offers to 5:00 p.m. (Montréal Time) on April 26, 2011 (the “Expiration Time”) to allow more holders of the Preferred Shares (the “Shareholders”) who desire to deposit their Preferred Shares to do so, unless the Offers are otherwise extended or withdrawn by the Bank. Aside from the above-described extension, the terms and conditions set forth in the Offers and issuer bid circular dated March 4, 2011 remain unchanged. A formal notice of extension will be mailed promptly to Shareholders of the Bank. The notice of extension will also be available at www.sedar.com.

Shareholders who have already deposited their Preferred Shares do not need to take any further action to accept the Offers. Shareholders who have not yet deposited their Preferred Shares in acceptance of an Offer may deposit their Preferred Shares at any time prior to 5:00 p.m. (Montréal Time) on April 26, 2011.

If, by the Expiration Time or within 120 days after the date of the issuer bid circular, whichever occurs first, an Offer has been accepted by the holders of not less than 90 per cent of the Preferred Shares of any series to which such Offer relates, the Bank currently intends to acquire the Preferred Shares held by those Shareholders who have not accepted such Offer either by extending the relevant Offer or pursuant to the compulsory acquisition provisions of Sections 283 to 293 of the Bank Act (Canada) on the same terms and at the same price for which the Preferred Shares were acquired under the relevant Offer (a “Compulsory Acquisition”). For greater certainty, in the event that less than 90 per cent of any of the Preferred Shares of any series is taken up, then a Compulsory Acquisition would only apply to the series of Preferred Shares of which 90 per cent or more were taken up and paid for under the Offer.

If the Bank acquires less than 90 per cent of the Preferred Shares of any series under the Offers, the Bank currently intends to redeem all outstanding Preferred Shares held by those Shareholders who have not accepted the Offers, and which have not been taken up and paid for by the Bank, in accordance with the redemption right attached to such Preferred Shares on the first date at which such Preferred Shares may be redeemed by the Bank at a price equal to $25.00 per share (together with all declared and unpaid dividends thereon up to the date set for redemption).

Any questions or for assistance in tendering Preferred Shares to the Offers, Shareholders are encouraged to contact Georgeson Shareholder Communications Canada Inc. at 1-866-374-9876, or by e-mail at askus@georgeson.com.

Caution Regarding Forward-Looking Statements
This press release includes certain forward-looking statements. These forward-looking statements include, but are not limited to, National Bank of Canada (the Bank)’s plans, objectives, expectations and intentions, including the Bank’s expectations regarding the terms of the substantial issuer bid, the Bank’s intention with respect to the subsequent purchases of Preferred Shares not deposited and purchased pursuant to the Offers, and other statements contained in this press release that are not historical facts. These forward-looking statements are typically identified by future or conditional verbs or words such as “outlook,” “believe,” “anticipate,” “estimate,” “project,” “expect,” “intend,” “plan,” and terms and expressions of similar import. These statements are based on the Bank’s current beliefs or expectations, including the Bank’s assumptions, beliefs and expectations regarding market conditions. These statements are inherently subject to significant risks, uncertainties and changes in circumstances, many of which are beyond the control of the Bank. The Bank’s expectations and future intentions may differ materially from those expressed or implied by such forward looking statements, including as a result of changes in global, political, economic, business, competitive, market and regulatory factors, and the other risks described in the Bank’s 2010 Annual Report, in other filings with Canadian securities regulators and in other communications. Except as required by law, the Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time, by it or on its behalf. The forward-looking information contained in this press release is presented for the purpose of interpreting the information contained herein and may not be appropriate for other purposes.

About National Bank of Canada
National Bank of Canada is an integrated group that provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. National Bank has over $152 billion in assets and, together with its subsidiaries, employs 18,407 people. The Bank’s securities are listed on the Toronto Stock Exchange (TSX: NA). For more information, visit the Bank’s website at www.nbc.ca. To access National Bank Financial Group’s financial education portal, visit www.clearfacts.ca.

Information (the telephone number provided below is for the exclusive use of journalists and other media representatives):

Claude Breton
Senior Manager – Public Affairs
National Bank Financial Group
Tel.: 514-394-8644