/NOT FOR DISTRIBUTION TO U.S. NEWS
WIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES./
MONTREAL, Sept. 1, 2020 /CNW/ - National Bank of
Canada ("National Bank") today
announced that it has entered into an agreement with a group of
agents led by National Bank Financial Inc. for the issuance of
$500 million of Limited Recourse Capital Notes, Series 1
(Non-viability Contingent Capital (NVCC)) (Subordinated
Indebtedness) (the "Notes").
The Notes will bear interest at a rate of 4.300% annually,
payable semi-annually, for the initial period ending on but
excluding November 15, 2025.
Thereafter, the interest rate on the Notes will reset every five
years at a rate equal to the prevailing 5-year Government of Canada
Yield plus 3.943%. The Notes will mature on November 15, 2080.
Concurrently with the issuance of the Notes, National Bank will
issue Non-Cumulative 5-Year Fixed Rate Reset First Preferred
Shares, Series 44 (non-viability contingent capital (NVCC))
(the "Series 44 Preferred Shares") to be held by
Computershare Trust Company of Canada as trustee for a newly-formed trust
(the "Limited Recourse Trust"). In case of non-payment of
interest on or principal of the Notes when due, the recourse of
each Note holder will be limited to that holder's proportionate
share of the Limited Recourse Trust's assets, which will consist of
Series 44 Preferred Shares except in limited circumstances.
National Bank may redeem the Notes during the period from
October 15 to and
including November 15, commencing in 2025 and every five years
thereafter, only upon the redemption by National Bank of the Series
44 Preferred Shares held in the Limited Recourse Trust, in
accordance with the terms of such shares and with the prior written
approval of the Superintendent of Financial Institutions
(Canada) (the "Superintendent"),
in whole on not less than 15 nor more than 60 days' prior
notice.
The purpose of the sale of the Notes is to enlarge National
Bank's Tier 1 capital base with a view to optimizing National
Bank's capital structure within the parameters prescribed by the
Superintendent for bank capital requirements. The net proceeds from
the sale of the Notes will be added to National Bank's general
funds and will be utilized for general banking purposes. The
expected closing date is on or about September 9, 2020. National Bank intends to file
in Canada a prospectus supplement
to its August 17, 2020 base shelf prospectus in respect of
this issue.
The Notes have not been and will not be registered under the
U.S. Securities Act of 1933, as amended, or under any state
securities laws, and may not be offered, sold, directly or
indirectly, or delivered within the
United States of America and its territories and possessions
or to, or for the account or benefit of, United States persons except in certain
transactions exempt from the registration requirements of such Act.
This press release shall not constitute an offer to sell or a
solicitation to buy securities in the
United States.
Caution Regarding Forward-Looking Statements
This press release includes certain forward-looking
statements. These statements are inherently subject to significant
risks, uncertainties and changes in circumstances, many of which
are beyond the control of National Bank. Except as required by law,
National Bank does not undertake to update any forward-looking
statements, whether written or oral, that may be made from time to
time, by it or on its behalf. The forward-looking information
contained in this press release is presented for the purpose of
interpreting the information contained herein and may not be
appropriate for other purposes.
About National Bank of Canada
With $322 billion in assets as at July 31,
2020, National Bank of Canada, together with its subsidiaries, forms
one of Canada's leading integrated
financial groups. It has more than 26,000 employees in
knowledge-intensive positions and has been recognized numerous
times as a top employer and for its commitment to diversity. Its
securities are listed on the Toronto Stock Exchange (TSX: NA).
Follow the Bank's activities at nbc.ca or via social
media such
as Facebook, LinkedIn and Twitter.
SOURCE National Bank of Canada