By Cristal Cody
Tupelo, Miss., May 28 - Royal Bank of Canada priced an upsized C$500 million of non-cumulative five-year rate reset first preferred shares to yield a 3.9% annual dividend for the initial period up to but excluding Aug. 24, 2019, according to a prospectus supplement.
Royal Bank of Canada sold 20 million shares of the series BB preferred stock at C$25.00 per share.
The previously announced deal was upsized from C$250 million, or 10 million shares.
RBC Dominion Securities Inc. was the bookrunner.
Royal Bank of Canada may redeem the preferreds in whole or in part at par on or after Aug. 24, 2019.
The dividend rate will reset every five years to 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 August 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 subsequently.
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$500 million, 20 million shares
|
| Maturity: | Aug. 24, 2019
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| Securities: | Non-cumulative reset preferred shares
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| Bookrunner: | RBC Dominion Securities Inc.
|
| Co-managers: | Scotia Capital Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., National Bank Financial Inc., TD Securities Inc., Desjardins Securities Inc., Canaccord Genuity Corp., GMP Securities LP, Dundee Securities Ltd., HSBC Securities (Canada) Inc., Laurentian Bank Securities Inc., Manulife Securities Inc. and Raymond James Ltd.
|
| 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
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| DBRS: Pfd-2
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| Distribution: | Canada
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