RBC announces changes to dividend rates for series AZ, BA preferreds

By Sarah Lizee

Olympia, Wash., April 24 – Royal Bank of Canada announced changes to the applicable dividend rates for its non-viability contingent capital (NVCC) non-cumulative five-year rate reset first preferred shares, series AZ and NVCC non-cumulative floating-rate first preferred shares, series BA.

For any series AZ shares that remain outstanding after May 24 holders will be entitled to receive quarterly fixed-rate non-cumulative preferential cash dividends, according to a press release.

The dividend rate for the five-year period from and including May 24 to but excluding May 24, 2024 will be 3.7% for series AZ shares, being equal to the five-year Canada bond yield determined as of April 24 plus 221 basis points.

For any series BA shares that may be issued on May 24, holders will be entitled to receive quarterly floating-rate non-cumulative preferential cash dividends, calculated on the basis of the actual number of days elapsed in that quarterly period divided by 365.

The dividend rate for the floating-rate period from and including May 24 to but excluding Aug. 24 will be 3.88%, being equal to the three-month Canada Treasury bill yield determined as of April 24 plus 221 bps.

RBC said that beneficial owners of series AZ shares who wish to exercise their conversion rights should instruct their broker or other nominee to exercise those rights on or prior to the notice deadline of 5 pm ET on May 9.

Royal Bank of Canada is a Toronto-based financial services company.

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