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National Bank of Canada offering 12 million series 38 preferred shares

Montreal-based National Bank of Canada is offering 12 million noncumulative five-year rate reset first preferred shares series 38 on a bought-deal basis, priced at C$25 apiece.

The bank entered into an agreement with a group of underwriters led by National Bank Financial Inc. for the issuance of the shares, granting them an option to purchase up to an additional four million series 38 preferred shares. National Bank of Canada expects C$300 million in gross proceeds from the offering or C$400 million if underwriters fully exercise their overallotment option.

The preferred shares will generate 4.45% yearly, payable quarterly, for the initial period ending Nov. 15, 2022, subject to the board's discretion.

Holders of the preferred shares may convert their shares into an equal number of noncumulative floating rate first preferred shares series 39, which would entitle them to receive quarterly floating dividends.

The bank expects to close the offering on or about June 13. Net proceeds will be added to the bank's capital base to be used for general corporate purposes.