TD, CIBC plan regulatory redemptions in 2022; none for BMO, NBC

By Toni Weeks

San Diego, Feb. 7 - TD Bank Group and Canadian Imperial Bank of Commerce are planning regulatory redemptions for 2022, whereas Bank of Montreal Financial Group and National Bank of Canada are not, according to press releases.

On Feb. 4 the Office of the Superintendent of Financial Institutions (OFSI) issued an advisory clarifying the Basel III changes in its domestic capital guidance. Under Basel III rules, any non-qualifying capital instruments outstanding as of 2022, the final year of the phase-out period, will not be recognized as regulatory capital.

OFSI is requiring banks to publicly disclose as soon as practical whether they expect to exercise a capital redemption due to a regulatory event and to publish a schedule of when those redemptions would occur.

TD Group said in its press release that it expects to exercise a regulatory event redemption right only in 2022 for any TD Capital Trust IV series 2 notes that are outstanding at that time.

Likewise, CIBC expects to exercise a regulatory event redemption only in 2022 in respect to its series B Innovative Tier-1 notes issued by CIBC Capital Trust.

In contrast, Bank of Montreal and National Bank of Canada said they do not anticipate redeeming any of their outstanding regulatory capital instruments through the use of a regulatory capital event and that the banks will not be disclosing a regulatory redemption event schedule.

TD Bank Group, CIBC and BMO are banks based in Toronto; NBC is based in Montreal.

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