Bank of Nova Scotia today announced a domestic public offering of 8 million non-cumulative five-year rate reset preferred shares Series 22 at a price of $25 a share, for gross proceeds of $200 million.

Shareholders will be entitled to receive a non-cumulative quarterly fixed dividend for the initial period ending January 25, 2014 yielding 5% per year, 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 five-year Government of Canada bond yield.

Shareholders 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 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 three-month Government of Canada Treasury Bill yield plus 1.88%, as and when declared by the Scotiabank board of directors. 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.

Scotiabank 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 September 9.

The bank says this domestic public offering is part of its “ongoing and proactive management of its Tier 1 capital structure.”