LB.PR.H - Series 13 Prospectus – Laurentian Bank Preferred Shares

LB.PR.H – Series 13 Prospectus – Laurentian Bank Preferred Shares

The following is a set of excerpts from the prospectus document for the Series 13 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 LB.PR.H – Series 13 Prospectus – Laurentian 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 27, 2014 $125,000,000 Non-Cumulative Class A Preferred Shares, Series 13 (5,000,000 Shares) The holders of Non-Cumulative Class A Preferred Shares, Series 13 (the “Preferred Shares Series 13”) of Laurentian Bank of Canada (the “Bank”) will be entitled to receive fixed non-cumulative preferential cash dividends, for the initial period from and including the closing date to, but excluding, June 15, 2019 (the “Initial Fixed Rate Period”), payable quarterly on the 15th day of March, June, September and December in each year, or if such day is not a business day, on the next business day, as and when declared by the board of directors of the Bank (the “Board of Directors”).
The initial dividend, if declared, shall be payable on June 15, 2014 and shall be $0.2150 per share, based on the anticipated closing date of April 3, 2014. Thereafter, quarterly dividends shall be at a rate of $0.26875 per share. See “Details of the Offering”.

Excerpt: Reset Date and Yield Terms

For each five-year period after the Initial Fixed Rate Period (each a “Subsequent Fixed Rate Period”), the holders of Preferred Shares Series 13 will be entitled to receive fixed non-cumulative preferential cash dividends, as and when declared by the Board of Directors, payable quarterly on the 15th day of March, June, September and December in each year, in the amount per share per annum determined by multiplying the Annual Fixed Dividend Rate (as defined below) 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 below) on the date on which the Annual Fixed Dividend Rate is determined plus 2.55%. See “Details of the Offering”.

Excerpt: Conversion Terms

Option to Convert Into Preferred Shares Series 14 The holders of Preferred Shares Series 13 will have the right, at their option, to convert their shares into an equal number of Non-Cumulative Class A Preferred Shares, Series 14 of the Bank (the “Preferred Shares Series 14”), subject to certain conditions, on June 15, 2019 and on June 15 every five years thereafter.
The holders of Preferred Shares Series 14 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 15th day of March, June, September and December in each year (the initial quarterly dividend period and each subsequent quarterly dividend period is referred to as a “Quarterly Floating Rate Period”), in the amount per share determined by multiplying the applicable Quarterly Floating Dividend Rate (as defined below) by $25.00.
The Quarterly Floating Dividend Rate will be equal to the sum of the T-Bill Rate (as defined below) plus 2.55% (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. See “Details of the Offering”.
*****Conversion to Common *****
Effective January 1, 2013 in accordance with capital adequacy requirements adopted by the Office of the Superintendent of Financial Institutions Canada (“OSFI”), non-common capital instruments issued after January 1, 2013, including subordinated debt securities or first preferred shares, must include terms providing for the full and permanent conversion of such securities into common shares upon the occurrence of certain trigger events relating to financial viability (the “Non-Viable Capital Contingency Provisions”) in order to qualify as regulatory capital. The terms of the Preferred Shares Series 13 and the Preferred Shares Series 14 provide that such shares will automatically and immediately be converted, on a full and permanent basis, into a specified number of common shares of the Bank (the “Common Shares”) upon the occurrence of a Trigger Event (as defined herein). See “Details of the Offering”.