TD Capital Trust IV, a subsidiary of the Toronto-Dominion Bank, is issuing two different series of notes to raise $1 billion, the bank announced on Thursday.

TD Bank and TD Capital Trust IV entered into an agreement with a syndicate of underwriters led by TD Securities Inc. for the issue, which is expected to close Jan. 26.

The issue will include $550 million of TD Capital Trust IV series 1 notes due June 30, 2108, and $450 million of TD Capital Trust IV series 2 notes, due June 30, 2108

The bank intends to file a final prospectus for the offering with the securities regulators in each of the provinces and territories of Canada.

TD Bank anticipates the notes will qualify as tier 1 capital, with any capital over the 15% regulatory limit to be temporarily counted as tier 2B capital.

Interest on the series 1 notes will be payable semi-annually at a rate of 9.523% per year. Starting on June 30, 2019, and on every fifth anniversary thereafter until June 30, 2104, the interest rate will reset.

Interest on the series 2 will be payable semi-annually at a rate of 10.00% per year. Starting on June 30, 2039, and on every fifth anniversary thereafter until June 30, 2104, the interest rate will reset.

The notes are redeemable by the trust on or after June 30, 2014, in whole or in part.

TD Bank noted that in certain circumstances, the notes or interest may be automatically exchanged or paid by the issuance of non-cumulative Class A first preferred shares of the bank.

The notes will not be listed on any stock exchange.

IE