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Preferred Share Description
Bank of Nova Scotia (BNS.PR.I) **New Issue**
4.85% Non-cumulative, Redeemable, Rate Reset, NVCC** preferred share, Series 40
Prospectus - October 4, 2018
DBRS Credit Rating: July 5, 2018 - DBRS confirmed the ratings of the Bank of Nova Scotia and its related entities, including Scotiabank’s Long-Term Issuer Rating of AA and Short-Term Issuer Rating of R-1 (high). The trend on all ratings is Stable. Scotiabank’s Long-Term Issuer Rating is composed of an Intrinsic Assessment of AA (low) and a Support Assessment of SA2, reflecting the expectation of timely, systemic support from the Government of Canada (rated AAA with a Stable trend by DBRS). The SA2 designation results in a one-notch lift to the Long-Term Issuer Rating. However, following the finalization of the Canadian Bank Recapitalization Regime, DBRS eventually expects to remove the uplift from systemic support. This will be actioned once a sufficient level of bail-inable senior debt is issued, thereby providing an adequate buffer for non-bail-inable obligations, which is then expected to offset the removal of systemic support.
Important Note: NVCC preferred shares have a lower credit rating than other BNS preferred share issues. DBRS assigned the NVCC Preferred Shares Series 38 a rating equal to the Bank’s intrinsic assessment less four rating notches because the Series 38 has only an Office of the Superintendent of Financial Institutions (OSFI)-compliant non-viable contingent capital (NVCC) trigger, which is consistent with the OSFI requirements for NVCC instruments, and no additional triggers.
**NVCC is short for Non-Viability Contingent Capital and it refers to the issuer's ability to convert the preferred shares into common shares if a "Trigger Event" occurs. See "Convertible by Company" section below for the definition of a trigger event.
- DBRS Rating
- Pfd-2 Stable Trend
- DBRS Rating Date
- Shares Issued
- Issued Date
- Shares O/S
- O/S Date
- $1.2125 per share per year
- Dividend Dates
- Payable on the last day of January, April, July and October
- Dividend Details
- Initially the dividend is set at a fixed annual rate of 4.85% until January 27, 2024. The dividend rate will be reset on January 27, 2024 and on January 27th every five years thereafter. The dividend rate will be set at an annual rate equal to the Government of Canada Yield (GCAN5YR) plus 2.43%.
- The shares will not be redeemable by the company prior to January 27, 2024. Redeemable at the company's option on January 27, 2024 and on January 27th every five years thereafter at $25.00 per share plus all declared and unpaid dividends.
- Holders of the Series 40 rate reset preferred shares have the right to convert their shares into an equal number of Series 41 Floating-Rate preferred shares on January 27, 2024 and on January 27th every five years thereafter. The Series 41 Floating-Rate preferred shares will calculate and pay dividends quarterly and the dividend rate will equal the Government of Canada 3-month Treasury Bill Rate plus 2.43%. On January 27, 2029 and on January 27th every five years thereafter holders of the Series 41 have the right to convert their shares into an equal number of Series 40 rate reset preferred shares.
- Transfer Agent
- Computershare Trust Company of Canada
- Computershare Trust Company of Canada
- Dividend Reinvestment Plan
- Holders may elect to receive their dividends in common shares of the Bank in lieu of cash dividends, in accordance with the Bank's Shareholder Dividend and Share Purchase Plan. Visit Dividend and Share Purchase Plan at http://scotiabank.com/ca/en/0,,3101,00.html
- Convertible by Company
- Upon the occurrence of a "Trigger Event", each outstanding Preferred Share Series 36 and, if issued, each outstanding Preferred Share Series 40 and 41 will automatically and immediately be converted, without the consent of the holders thereof, into that number of fully-paid common shares of the Bank determined by dividing $25.00 plus any declared but unpaid dividends in respect of such Preferred Shares Series 40 or Preferred Shares Series 41 by the Conversion Price. The “Trigger Event” has the meaning as set out in the Office of the Superintendent of Financial Institutions Canada, Guideline for Capital Adequacy Requirements, Chapter 2 - Definition of Capital, effective January 1, 2013, as such term may be amended or superseded by OSFI from time to time.
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