National Bank of Canada (“National Bank”) today announced that it has
entered into an agreement with a group of underwriters led by National
Bank Financial Inc. for the issuance on a bought deal basis of 8
million non-cumulative 5-year rate reset first preferred shares series
40 (non-viability contingent capital (NVCC)) (the “Series 40 Preferred
Shares”) at a price of $25.00 per share, to raise gross proceeds of
National Bank has granted the underwriters an option to purchase, on
the same terms, up to an additional 4 million Series 40 Preferred
Shares. This option is exercisable in whole or in part by the
underwriters at any time up to two business days prior to closing. The
gross proceeds raised under the offering will be $300 million
should this option be exercised in full.
The Series 40 Preferred Shares will yield 4.60% annually, payable
quarterly, as and when declared by the Board of Directors of National
Bank, for the initial period ending May 15, 2023. The first of such
dividends, if declared, shall be payable on May 15, 2018. Thereafter,
the dividend rate will reset every five years at a level of 258 basis
points over the then 5-year Government of Canada bond yield. Subject to regulatory approval, National Bank may
redeem the Series 40 Preferred Shares in whole or in part at par on
May 15, 2023 and on May 15 every five years thereafter.
Holders of the Series 40 Preferred Shares will have the right to
convert their shares into an equal number of non-cumulative floating
rate first preferred shares series 41 (non-viability contingent
capital (NVCC)) (the “Series 41 Preferred Shares”), subject to certain
conditions, on May 15, 2023, and on May 15 every five years
thereafter. Holders of the Series 41 Preferred Shares will be entitled
to receive quarterly floating dividends, as and when declared by the
Board of Directors of National Bank, equal to the 90-day Government of
Canada Treasury Bill rate plus 258 basis points.
The net proceeds of the offering will be used for general corporate
purposes and added to National Bank’s capital base. The expected
closing date is on or about January 22, 2018. National Bank intends to
file in Canada a prospectus supplement to its November 21, 2016 base
shelf prospectus in respect of this issue.
The Series 40 Preferred Shares and Series 41 Preferred Shares have
not been and will not be registered under the U.S. Securities Act of
1933, as amended, or under any state securities laws, and may not be
offered, sold, directly or indirectly, or delivered within the United
States of America and its territories and possessions or to, or for
the account or benefit of, United States persons except in certain
transactions exempt from the registration requirements of such Act.
This press release shall not constitute an offer to sell or a
solicitation to buy securities in the United States.
Caution Regarding Forward-Looking Statements
This press release includes certain forward-looking statements.
These statements are inherently subject to significant risks,
uncertainties and changes in circumstances, many of which are beyond
the control of the Bank. 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
With $246 billion in
assets as at October 31, 2017, National
Bank of Canada, together with its subsidiaries, forms one of
Canada's leading integrated financial groups. It has more than
21,000 employees in knowledge-intensive positions and has been
recognized numerous times as a top employer and for its commitment
to diversity. Its securities are listed on the Toronto Stock
Exchange (TSX: NA). Follow the Bank’s activities at nbc.ca or via social media such as Facebook,