The Toronto-Dominion Bank it has arranged a $200 million issue of preferred stock, the bank said Thursday.

TD said it 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 AG, carrying a face value of $25 a share.

TD said its issue will expand to $275 million if the underwriters fully exercise an option on additional shares.

The Series AG shares will yield 6.25% until April 30, 2014, then will have its dividend reset every five years at 438 basis points above the prevailing five-year Government of Canada bond yield.

Holders of the Series AG Shares will have the right to convert their shares into non-cumulative Floating Rate Class A Preferred Shares, Series AH, subject to certain conditions, on April 30, 2014, and on April 30 every five years thereafter.

Holders of the Series AH Shares will be entitled to receive quarterly floating dividends, as and when declared by the board of directors of TD Bank, equal to the three-month Government of Canada Treasury bill yield plus 438 basis points.

TD’s announcement was the latest in a run of preferred shares issues by Canada’s banks.

National Bank of Canada has entered into an agreement with a group of underwriters for a $100 million offering of preferred shares, the bank said Thursday.

On Wednesday, Royal Bank of Canada and Bank of Nova Scotia both announced $250 million issues of preferred shares.

IE