RBC won’t redeem series BB preferreds; holders have conversion option

By Angela McDaniels

Tacoma, Wash., July 22 – Royal Bank of Canada will not exercise its right to redeem its series BB non-viability contingent capital non-cumulative five-year rate reset first preferred shares on Aug. 24, according to a company news release.

There are 20 million series BB preferreds outstanding.

Subject to some conditions, the holders of the series BB preferreds have the right to convert all or part of their series BB preferreds, on a one-for-one basis, into series BC non-viability contingent capital non-cumulative floating-rate first preferred shares on Aug. 24. The conversion will occur on Aug. 26, the first business day following the conversion date.

The conversion period runs from July 25 until 5 p.m. ET on Aug. 9.

The conversion rights are subject to the following conditions:

• If RBC determines that there would be less than 1 million series BC preferreds outstanding after the conversions take place, then holders will not be entitled to convert their series BB preferreds into series BC preferreds; and

• Alternatively, if RBC determines that there would remain outstanding less than 1 million series BB preferreds after Aug. 24, then all remaining series BB preferreds will automatically be converted into series BC preferreds on a one-for-one basis on Aug. 24.

In either case, RBC will give written notice to that effect to holders of series BB preferreds no later than Aug. 17.

RBC is a Toronto-based financial services company.

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