By Cristal Cody
Tupelo, Miss., March 5 – Royal Bank of Canada announced on Thursday that it priced C$300 million of non-cumulative five-year rate reset preferred shares with a 3.6% annual dividend for the initial period ending Nov. 24, 2020.
Royal Bank of Canada sold 12 million shares of the series BF preferred stock (Baa3/P-2/DBRS: Pfd-2) at C$25.00 per share.
RBC Capital Markets was the lead manager.
The transaction includes an over-allotment option of C$50 million, or 2 million shares.
The dividend rate will reset every five years a rate equal to 262 basis points over the five-year Government of Canada bond yield.
On or after Nov. 24, 2020, the bank may redeem the preferred shares in whole or in part at par.
Series BF preferred shareholders will have the right to convert all or part of their shares to series BG non-cumulative floating-rate preferred shares on Nov. 24, 2020 and on Nov. 24 every five years thereafter. Series BG holders will be entitled to receive a non-cumulative quarterly floating dividend equal to the three-month Government of Canada Treasury bill yield plus 262 bps.
Series BG preferred shareholders will have the right to convert all or part of their stock to series BF preferred shares on Nov. 24, 2025 and on Nov. 24 every five years thereafter.
The financial services company is based in Toronto.
| Issuer: | Royal Bank of Canada
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| Amount: | C$300 million, 12 million shares
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| Maturity: | Nov. 24, 2020
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| Securities: | Non-cumulative five-year rate reset preferred shares
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| Bookrunner: | RBC Capital Markets
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| Dividend: | 3.6%; resets Nov. 24, 2020 and every five years thereafter at five-year Government of Canada bond yield plus 262 bps
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| Price: | C$25.00 per share
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| Call feature: | On or after Nov. 24, 2020 at par
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| Pricing date: | March 5
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| Settlement date: | March 13
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| Ratings: Moody’s: Baa3
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| Standard & Poor’s: P-2
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| DBRS: Pfd-2
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| Distribution: | Canada
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