By Cristal Cody
Tupelo, Miss., Jan. 26 – Royal Bank of Canada announced on Monday that it sold an upsized C$600 million of non-cumulative rate reset preferred shares to yield a 3.6% annual dividend for the initial period ending May 24, 2020.
Royal Bank of Canada priced 24 million shares of the series BD preferred stock (Baa2/P-2/DBRS: Pfd-2) at C$25.00 per share.
The deal was upsized from C$300 million, or 12 million shares.
RBC Capital Markets was the bookrunner.
Royal Bank of Canada may redeem some or all the shares on or after May 24, 2020.
The dividend rate will reset every five years at a rate equal to 274 basis points over the five-year Government of Canada bond yield.
Series BD preferred stockholders may convert all or part of their shares to series BE non-cumulative floating-rate preferred shares on May 24, 2020 and on May 24 of every following fifth year.
Series BE preferred shareholders 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 274 bps.
Series BE holders may convert all or part of their shares to series BD preferred shares on May 24, 2025 and on May 24 of every fifth year thereafter.
Royal Bank of Canada plans to use the proceeds from the offering for general business purposes.
The financial services company is based in Toronto.
| Issuer: | Royal Bank of Canada
|
| Amount: | C$600 million, 24 million shares
|
| Maturity: | May 24, 2020
|
| Securities: | Non-cumulative reset preferred shares
|
| Bookrunner: | RBC Capital Markets
|
| Dividend: | 3.6%; resets May 24, 2020 and every five years thereafter at five-year Government of Canada bond yield plus 274 bps
|
| Price: | C$25.00 per share
|
| Call feature: | On or after May 24, 2020 at par
|
| Pricing date: | Jan. 26
|
| Settlement date: | Jan. 30
|
| Ratings: Moody’s: Baa2
|
| Standard & Poor’s: P-2
|
| DBRS: Pfd-2
|
| Distribution: | Canada
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