The Toronto-Dominion Bank today announced today that it has entered into an agreement with a group of underwriters for an issue of 8 million non-cumulative 5-Year Rate Reset Class A Preferred Shares, Series AA, carrying a face value of $25 per share, to raise gross proceeds of $ 200 million.

TD Bank intends to file in Canada a prospectus supplement to its Jan. 11, 2007 base shelf prospectus in respect of this issue.

TD Bank has also granted the underwriters an option to purchase, on the same terms, up to an additional 2 million Series AA Shares. This option is exercisable in whole or in part by the underwriters at any time up to two business days prior to closing. The maximum gross proceeds raised under the offering will be $250 million should this option be exercised in full.

The Series AA Shares will yield 5% annually, payable quarterly, as and when declared by the TD board of directors, for the initial period ending Jan. 31, 2014. Thereafter, the dividend rate will reset every five years at a level of 196 basis points over the then five-year Government of Canada bond yield.

Holders of the Series AA Shares will have the right to convert their shares into non-cumulative Floating Rate Class A Preferred Shares, Series AB, subject to certain conditions, on Jan. 31, 2014, and on January 31st every five years thereafter. Holders of the Series AA Shares will be entitled to receive quarterly floating dividends, as and when declared by the TD board of directors of TDBFG, equal to the three-month Government of Canada Treasury Bill yield plus 196 basis points.

The issue is anticipated to qualify as Tier 1 capital for the bank and the expected closing date is September 12.

The group of underwriters is led by TD Securities Inc.