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Preferred Share Description
National Bank of Canada (NA.PR.W)
3.90% Non-Cumulative, Redeemable, Rate Reset, NVCC*, 1st preferred shares, Series 32
Prospectus - October 2, 2014
DBRS Credit Rating: July 26, 2018 - DBRS confirmed the ratings of National Bank of Canada and its related entities, including the Bank’s Long-Term Issuer Rating at AA (low) and Short-Term Issuer Rating at R-1 (middle). The trends on all ratings are Stable. National’s Intrinsic Assessment (IA) is A (high) and Support Assessment is 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 one notch of uplift from the IA to the Long-Term Issuer Rating. However, following the finalization of the Canadian Bank Recapitalization Regime (the Bail-In 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 expected to offset the removal of systemic support (see the press release “DBRS Takes Rating Actions on Six Canadian Banking Groups after Finalization of Bail-In Regime,” April 19, 2018).
Important Credit Rating Note: NVCC preferred shares have a lower credit rating than other preferred share issues. DBRS assigned the NVCC Preferred Shares a rating equal to the Bank’s intrinsic assessment less one rating notch because the Series 32 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 (low) Stable Trend
- DBRS Rating Date
- Shares Issued
- Issued Date
- Shares O/S
- O/S Date
- $0.975 per share per year
- Dividend Dates
- On the 15th day of February, May, August and November
- Dividend Details
- The dividend rate is fixed until February 15, 2020. The dividend will be reset on February 15, 2020 and on February 15th every five years thereafter at an annual dividend rate equal to the sum of the Government of Canada Yield (GCAN5YR) plus 2.25%.
- Not redeemable prior to February 15, 2020. The bank can redeem the shares on February 15, 2020 and on February 15th every 5 years thereafter at $25.00 per share.
- Holders of the Series 32 preferred shares will have the right to convert their shares into an equal number of Series 33 Floating-Rate preferred shares on February 15, 2020 and on February 15th every five years thereafter. The Series 33 Floating-Rate shares will calculate and pay a dividend, quarterly, at a rate equal to the sum of the Government of Canada 3-month T-Bill Rate plus 2.25%. In addition, on February 15, 2025 and on February 15th every five years thereafter holders of the Series 33 Floating-Rate shares will have the right to convert their shares back into an equal number of Series 32 preferred shares.
- Lead Underwriter(s)
- National Bank Financial Inc.
- Transfer Agent
- Computershare Trust Company of Canada
- Computershare Trust Company of Canada
- Dividend Reinvestment Plan
- Not available to preferred shareholders
- Convertible by Company
- Contingent Conversion: If a "Trigger Event" (as defined below) were to occur, all of the then outstanding Preferred Shares Series 32 and 33 will be automatically exchanged, without the consent of the holders, for newly issued fully-paid and freely-tradable common shares of the Bank (the “Common Shares”), the number of which to be determined in accordance with the Contingent Conversion Formula; rounding down, if necessary, to the nearest whole number of Common Shares, such conversion being referred to herein as the “Contingent Conversion”. Fractions of Common Shares will not be issued or delivered pursuant to a Contingent Conversion and no cash payment will be made in lieu thereof. A Trigger Event means any one of the following: 1) the Superintendent publicly announces that the Bank has been advised, in writing, that the Superintendent is of the opinion that the Bank has ceased, or is about to cease, to be viable and that, after the conversion of the Preferred Shares Series 32 and all other non-viability contingent capital instruments issued by the Bank and taking into account any other factors or circumstances that are considered relevant or appropriate, it is reasonably likely that the viability of the Bank will be restored or maintained; or 2) a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent or agency thereof without which the Bank would have been determined by the Superintendent to be non-viable. See the share's prospectus for the exact details.
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