TORONTO, Jan 21 (Reuters) - Two of Canada’s big banks said on Wednesday they plan to raise money in a preferred share offering, a move other domestic banks have taken recently to bolster their capital positions.
Royal Bank of Canada (RY.TO), Canada’s biggest bank, said its offering would consist of 8 million noncumulative five-year preferred shares with a face value of C$25 each.
The domestic offering totals C$200 million ($158.73 million), the bank said, and the series will yield 6.25 percent annually.
Holders are entitled to a noncumulative quarterly fixed dividend for the initial period ending Feb. 24, 2014, in the amount of C$1.5625 a share.
The bank has also granted underwriters an option to purchase an additional 3 million preferred shares.
Shares of Royal Bank rose 90 Canadian cents, or 2.9 percent, to C$31.74 on the Toronto Stock Exchange on Wednesday afternoon.
Also on Wednesday, Bank of Nova Scotia (BNS.TO) said it is offering 8 million noncumulative five-year preferred shares with a face value of C$25 each, for a total of C$200 million.
Holders will be entitled to a noncumulative quarterly fixed dividend for the initial period ending April 25, 2014. The series will also yield 6.25 percent annually, the bank said.
Scotiabank stock climbed 63 Canadian cents, or 2.2 percent, to C$29.21.
Late last year, a number of domestic banks issued shares to boost their capital ratios, a measure of financial stability. ($1=$1.26 Canadian) (Reporting by Jennifer Kwan; editing by Rob Wilson)