By Cristal Cody
Eureka Springs, Ark., March 10 – Canadian Western Bank announced on Thursday that it priced C$100 million of non-cumulative rate reset first preferred shares with a 6.25% annual dividend for the initial period ending July 31, 2021.
The bank sold 4 million shares of the series 7 non-viability contingent capital preferred stock (DBRS: Pfd-3) at C$25.00 per share.
The deal includes an over-allotment option of C$15 million, or 600,000 shares.
National Bank Financial Inc. was the bookrunner.
After the initial five-year period, the dividend rate will reset at a level of 547 basis points over the then five-year Government of Canada bond yield. The rate will reset every five years.
Canadian Western Bank may redeem the preferred shares on July 31, 2021 and on July 31 every five years thereafter at a price of C$25.00 per share.
If the shares are not redeemed, holders may convert their shares into series 8 NVCC non-cumulative floating-rate first preferred shares on July 31, 2021 and on July 31 every five years thereafter. Series 8 preferred shareholders will be entitled to receive quarterly floating dividends equal to the 90-day Government of Canada treasury bill rate plus 547 bps.
Proceeds from the offering will be used for general corporate purposes and are expected to qualify as Tier 1 capital for the bank.
Canadian Western Bank is a bank and financial services company based in Edmonton, Alta.
| Issuer: | Canadian Western Bank
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| Amount: | C$100 million, 4 million shares
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| Greenshoe: | C$15 million, 600,000 shares
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| Maturity: | July 31, 2021
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| Securities: | NVCC non-cumulative rate reset first preferred shares
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| Bookrunner: | National Bank Financial Inc.
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| Dividend: | 6.25%; resets every five years at 547 bps over then five-year Government of Canada bond yield
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| Price: | C$25.00 per share
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| Call feature: | July 31, 2021 and on July 31 every five years at C$25.00 per share
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| Pricing date: | March 10
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| Settlement date: | March 31
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| Rating: | DBRS: Pfd-3
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| Distribution: | Canada
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