By Marisa Wong
Los Angeles, April 6 – Bank of Nova Scotia priced $1.25 billion of 4.588% fixed-rate resetting subordinated tier 2 notes (Baa1/BBB+/DBRS: A) at 99.997 on Tuesday, according to an FWP filing with the Securities and Exchange Commission.
The 15-year non-viability contingent capital notes will bear interest at 4.588% until the May 4, 2032 reset date. Then the notes will bear interest at a rate equal to Treasuries plus 205 basis points as calculated on the reset rate determination date.
The notes are non-callable for five years and then callable at a make-whole price of Treasuries plus 35 bps until three months before the reset date, when they are callable at par.
Priced at Treasuries plus 205 bps, the notes had been talked initially in the Treasuries plus 225 bps area, as previously reported.
Scotia Capital (USA) Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are the bookrunners.
Proceeds will be used for general business purposes.
The bank also priced $2.1 billion of notes due April 11, 2025 in two parts on Tuesday.
The bank is based in Toronto.
| Issuer: | Bank of Nova Scotia
|
| Amount: | $1.25 billion
|
| Issue: | Fixed-rate resetting subordinated tier 2 notes (non-viability contingent capital notes)
|
| Maturity: | May 4, 2037
|
| Bookrunners: | Scotia Capital (USA) Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC
|
| Co-managers: | BNY Mellon Capital Markets, LLC and Desjardins Securities Inc.
|
| Trustee: | Computershare
|
| Counsel to issuer: | Osler, Hoskin & Harcourt LLP, Shearman & Sterling LLP and Cadwalader, Wickersham & Taft LLP
|
| Coupon: | 4.588% starting rate; resets on May 4, 2032 to rate equal to Treasuries plus 205 bps
|
| Price: | 99.997
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| Yield: | 4.588%
|
| Spread: | Treasuries plus 205 bps
|
| Call features: | Non-callable for five years; make-whole call at Treasuries plus 35 bps until three months before the reset date; par call until reset date
|
| Trade date: | April 5
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| Settlement date: | April 12
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| Ratings: | Moody’s: Baa1
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| S&P: BBB+
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| DBRS: A
|
| Price talk: | Treasuries plus 225 bps area
|
| Distribution: | SEC registered
|
| Cusip: | 06417XAG6
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