CWB.PR.C - Series 7 Prospectus – Canadian Western Bank Preferred Shares

CWB.PR.C – Series 7 Prospectus – Canadian Western Bank Preferred Shares

The following is a set of excerpts from the prospectus document for the Series 7 preferreds. The excerpts, highlight the most relevant information, an investor should know when analyzing this preferred. A link to the prospectus is provided lower in this page. The original document for CWB.PR.C – Series 7 Prospectus – Canadian Western Bank Preferred Shares was used for the excerpts and the important information was highlighted for quick access.

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Excerpt: Size and initial yield

March 22, 2016 $140,000,000 5,600,000 Non-Cumulative 5-Year Rate Reset First Preferred Shares Series 7 (Non-Viability Contingent Capital (NVCC)) This offering (the “Offering”) of non-cumulative 5-year rate reset First Preferred Shares Series 7 (Non-Viability Contingent Capital (NVCC)) (the “Series 7 Preferred Shares”) of Canadian Western Bank (the “Bank”) under this short form prospectus consists of 5,600,000 Series 7 Preferred Shares.
The holders of Series 7 Preferred Shares will be entitled to receive fixed non-cumulative preferential cash dividends, as and when declared by the board of directors of the Bank (the “Board of Directors”), for the initial period commencing on the Closing Date (as defined herein) and ending on and including July 31, 2021 (the “Initial Fixed Rate Period”), payable quarterly on the last day of January, April, July and October in each year or if such day is not a business day, on the next business day, at an annual rate equal to $1.5625 per Series 7 Preferred Share.
The initial dividend, if declared, will be payable on July 31, 2016 and will be $0.5223 per Series 7 Preferred Share, based on the anticipated Closing Date of March 31, 2016. Thereafter, quarterly dividends will be at an annual rate of $1.5625 per Series 7 Preferred Share during the Initial Fixed Rate Period. Reference is made to “Details of the Offering”.

Excerpt: Reset Date and Yield Terms

For each 5-year period after the Initial Fixed Rate Period (each a “Subsequent Fixed Rate Period”), the holders of Series 7 Preferred Shares will be entitled to receive fixed non-cumulative preferential cash dividends, as and when declared by the Board of Directors, payable quarterly on the last day of January, April, July and October in each year, in the amount per share per annum determined by multiplying the Annual Fixed Dividend Rate (as defined herein) applicable to such Subsequent Fixed Rate Period by $25.00.
The Annual Fixed Dividend Rate for the ensuing Subsequent Fixed Rate Period will be determined by the Bank on the 30th day prior to the first day of such Subsequent Fixed Rate Period and will be equal to the sum of the Government of Canada Yield (as defined herein) on the date on which the Annual Fixed Dividend Rate is determined plus 5.47%. Reference is made to “Details of the Offering”.

Excerpt: Conversion Terms

Option to Convert Into Series 8 Preferred Shares The holders of Series 7 Preferred Shares will have the right, at their option, to convert any or all of their Series 7 Preferred Shares into an equal number of non-cumulative floating rate First Preferred Shares Series 8 (Non-Viability Contingent Capital (NVCC)) of the Bank (the “Series 8 Preferred Shares”), subject to certain conditions, on July 31, 2021 and on July 31st every five years thereafter.
The holders of Series 8 Preferred Shares will be entitled to receive floating rate non-cumulative preferential cash dividends, as and when declared by the Board of Directors, payable quarterly on the last day of January, April, July and October in each year or if such day is not a business day, on the next business day (the initial quarterly dividend period and each subsequent quarterly dividend period is referred to as a “Quarterly Floating Rate Period”), in the amount per Series 8 Preferred Share determined by multiplying the applicable Floating Quarterly Dividend Rate (as defined herein) by $25.00.
The Floating Quarterly Dividend Rate will be equal to the sum of the T-Bill Rate (as defined herein) plus 5.47% (calculated on the basis of the actual number of days elapsed in the applicable Quarterly Floating Rate Period divided by 365) determined on the 30th day prior to the first day of the applicable Quarterly Floating Rate Period. Reference is made to “Details of the Offering”.
*****Conversion to Common *****
Upon the occurrence of a Trigger Event (as defined herein), each Series 7 Preferred Share and, if issued, each Series 8 Preferred Share will be and will be deemed, for all purposes, to be, automatically converted (a “Contingent Conversion”), without the consent of the holders thereof, into that number of fully-paid common shares of the Bank (“Common Shares”) determined by dividing a multiplier of the Preferred Share Conversion Value (as defined herein) by the Conversion Price (as defined herein).
Investors should therefore carefully consider the disclosure with respect to the Bank, the Series 7 Preferred Shares, the Series 8 Preferred Shares, the Common Shares and the consequences of a Trigger Event included and incorporated by reference in this prospectus.