By Cristal Cody
Tupelo, Miss., May 23 - Royal Bank of Canada said on Friday that it priced C$250 million of non-cumulative reset preferred shares to yield a 3.9% annual dividend for the period after Aug. 24, 2014 and ending Aug. 24, 2019, subject to board approval.
Royal Bank of Canada sold 10 million shares of the series BB preferred stock (Baa2//DBRS: Pfd-2) at C$25.00 per share.
RBC Capital Markets was the bookrunner.
The deal includes an over-allotment option of C$50 million, or 2 million shares.
Royal Bank of Canada may redeem the shares in whole or in part at par on or after Aug. 24, 2019.
The dividend rate will reset every five years at a rate equal to 226 basis points over the five-year Government of Canada bond yield.
Series BB preferred shareholders have the right to convert all or part of their shares to series BC non-cumulative floating-rate preferred shares on Aug. 24, 2019 and on Aug. 24 every five years thereafter. Series BC holders will be entitled to receive a non-cumulative quarterly floating dividend at a rate equal to the three-month Government of Canada treasury bill yield plus 226 bps.
Series BC holders may convert all or part of their shares to series BB preferred shares on Aug. 24, 2024 and on August 24 every five years thereafter.
The Toronto-based financial services company plans to use the proceeds from the offering for general business purposes.
| Issuer: | Royal Bank of Canada
|
| Amount: | C$250 million, 10 million shares
|
| Greenshoe: | C$50 million, 2 million shares
|
| Maturity: | Aug. 24, 2019
|
| Securities: | Non-cumulative reset preferred shares
|
| Bookrunner: | RBC Capital Markets
|
| Dividend: | 3.9%; resets on or after Aug. 24, 2019 and every five years at five-year Government of Canada bond yield plus 226 bps
|
| Price: | C$25.00 per share
|
| Call feature: | On or after Aug. 24, 2019 in whole or in part at par
|
| Pricing date: | May 23
|
| Settlement date: | June 3
|
| Ratings: | Moody's: Baa2
|
| DBRS: Pfd-2
|
| Distribution: | Canada
|
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