The Toronto-Dominion Bank plans a domestic public offering of up to $275 million of preferred shares, the bank said Wednesday.

The issue is anticipated to qualify as Tier 1 capital for the bank and the expected closing date is April 3.

TD has entered into an agreement with a group of underwriters led by TD Securities Inc. for an issue of 8 million non-cumulative 5-Year Rate Reset Class A Preferred Shares, Series AK, carrying a face value of $25.00 per share.

TD has also granted the underwriters an option to purchase, on the same terms, up to an additional 3 million Series AK 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 $275 million should this option be exercised in full.

The Series AK Shares will yield 6.25% annually, payable quarterly for the initial period ending July 31, 2014. Thereafter, the dividend rate will reset every five years at a level of 4.33% over the then five-year Government of Canada bond yield.

Holders of the Series AK Shares will have the right to convert their shares into non-cumulative Floating Rate Class A Preferred Shares, Series AL (the Series AL Shares), subject to certain conditions, on July 31, 2014, and on July 31st every five years thereafter. Holders of the Series AL Shares will be entitled to receive quarterly floating dividends equal to the three-month Government of Canada Treasury bill yield plus 4.33%.

IE