Scotiabank has announced a domestic public offering of 12 million preferred shares worth $300 million.
The shares are non-cumulative 5-year rate reset preferred shares Series 18 and are offered at a price of $25 per share
The bank said holders of preferred shares series 18 will be entitled to receive a non-cumulative quarterly fixed dividend of 5% per year for the initial five-year period ending April 25, 2013, which will be distributed as and when declared by the Board of Directors of Scotiabank. The dividend rate will then reset every five years at a level of 205 basis points over the 5-year Canada bond yield.
Shareholders will, subject to certain conditions, have the option to convert all or any part of their shares to non-cumulative floating rate preferred shares Series 19 of Scotiabank, according to the bank. As well, holders of the Preferred Shares Series 19 will be entitled to receive a non-cumulative quarterly floating dividend equal to the 3-month Government of Canada Treasury Bill yield plus 205 basis points, as and when declared by the Board of Directors of Scotiabank.
The Bank has agreed to sell the Preferred Shares Series 18 to a syndicate of underwriters led by Scotia Capital Inc. on a bought deal basis. The Bank has granted the underwriters an over allotment option to purchase up to an additional $45 million of the Preferred Shares Series 18 at any time up to 30 days after closing.
The bank is expecting the transaction to close on or after March 25, 2008. It said the offering is part of managing the its Tier 1 capital structure.
The two series are not available for sale in the U.S.