TD Bank to sell up to C$1.4 billion in common shares
By Lynne Olver
TORONTO (Reuters) - Canada's two largest banks announced equity financings on Monday that will increase their regulatory capital ratios.
After markets closed, Toronto-Dominion Bank said it had sold common shares worth C$1.2 billion in order to reassure investors about its capital strength, after the bank's key capital ratio had fallen to the lowest among its peers.
Toronto-Dominion, Canada's second largest bank, said it had issued 30.4 million common shares at C$39.50 each.
A group of underwriters led by TD Securities can buy up to 4.56 million additional shares, which would put the maximum gross proceeds at C$1.38 billion.
TD Bank shares closed at C$42.90 on the Toronto Stock Exchange, up 3.9 percent. Most Canadian bank stocks got a lift from news of U.S. government support for Citigroup.
In a separate announcement after the bell, Royal Bank of Canada said it would issue C$225 million of five-year rate reset preferred shares. Earlier in the day, RBC had said its quarterly profit would be lower than analysts had expected because of C$670 million in pretax losses on various securities.
For its part, TD said that its new common equity issue, plus a preferred share issue earlier this month, would push up its Tier 1 capital ratio to about 9 percent, versus 8.3 percent as of November 1.
"I think people were surprised at how low the Tier 1 ratio was," said Darren Dansereau, a portfolio manager at QV Investors in Calgary, which owns TD shares. Continued...