New Issue: BNS Fixed-Reset 5.00%+188bp

And now there are eight. Two more and I’ll add them to the HIMIPref™ database.

BNS has announced:

a domestic public offering of 8 million non-cumulative 5-year rate reset preferred shares Series 22 (the “Preferred Shares Series 22”) at a price of $25.00 per share, for gross proceeds of $200 million.

Holders of Preferred Shares Series 22 will be entitled to receive a non-cumulative quarterly fixed dividend for the initial period ending January 25, 2014 yielding 5.00% per annum, as and when declared by the Board of Directors of Scotiabank. Thereafter, the dividend rate will reset every five years at a rate equal to 1.88% over the 5-year Government of Canada bond yield.

Holders of Preferred Shares Series 22 will, subject to certain conditions, have the right to convert all or any part of their shares to non-cumulative floating rate preferred shares Series 23 (the “Preferred Shares Series 23”) of Scotiabank on January 26, 2014 and on January 26 every five years thereafter.

Holders of the Preferred Shares Series 23 will be entitled to receive a non-cumulative quarterly floating dividend at a rate equal to the 3-month Government of Canada Treasury Bill yield plus 1.88%, as and when declared by the Board of Directors of Scotiabank. Holders of Preferred Shares Series 23 will, subject to certain conditions, have the right to convert all or any part of their shares to Preferred Shares Series 22 on January 26, 2019 and on January 26 every five years thereafter.

The Bank has agreed to sell the Preferred Shares Series 22 to a syndicate of underwriters led by Scotia Capital Inc. on a bought deal basis. The Bank has granted to the underwriters an option to purchase up to an additional 2 million Preferred Shares Series 22 at closing, which option is exercisable by the underwriters any time up to 48 hours before closing.

Closing is expected to occur on or after September 9, 2008.

Issue: Bank of Nova Scotia Non-Cumulative 5-Year Rate Reset Preferred Shares Series 22

Size: 8-million shares (=$200-million), greenshoe for 2-million shares (=$50-million) exercisable before closing.

Initial Dividend: 5.00% p.a., paid quarterly, until the first Exchange Date

Subsequent Dividends: 5-year Canadas +188bp, reset on Exchange Dates

Exchange Date: January 26, 2014 and every five years thereafter.

Exchange Option: Exchangeable to and from Series 23, which pays 3-month bills + 188bp, on Exchange Dates, reset quarterly.

Redemption: Series 22 (5-year-rate) redeemable every Exchange Date at $25.00. Series 23 (floater) is redeemable every Exchange Date at $25.00 and at all other times at $25.50.

Scotia’s second issue paid 5.00%+170; their first issue paid 5.00%+205. Well … if I do add them to HIMIPref™, at least I’ll have a variety of resets to analyze! And this is a Good Thing.

I have written an article on the analysis of Fixed-Resets.

2 Responses to “New Issue: BNS Fixed-Reset 5.00%+188bp”

  1. […] now there are nine. One more and I’ve got to get cracking with a – thankfully, rather minor – HIMIPref™ […]

  2. […] was somewhat surprised to see that the issue size was $300-million, since the original announcement was for $200-million with a $50-million greenshoe, but SEDAR reveals (”Bank of Nova Scotia, […]

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