TD Bank 2010 Annual Report Download - page 117

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TD BANK GROUP ANNUAL REPORT 2010 FINANCIAL RESULTS 115
circumstances. TD CaTS III are not convertible or redeemable at the
holder’s option. Trust III is consolidated by the Bank and TD CaTS III
are classified as non-controlling interests in subsidiaries.
TD Capital Trust IV Notes – Series 1 due June 30, 2108 (TD CaTS IV
Notes – Series 1), TD Capital Trust IV Notes – Series 2 due June 30,
2108 (TD CaTS IV Notes – Series 2) and TD Capital Trust IV Notes –
Series 3 due June 30, 2108 (TD CaTS IV Notes – Series 3) (collectively,
TD CaTS IV Notes) were issued by TD Capital Trust IV (Trust IV), a trust
established under the laws of the Province of Ontario, whose voting
securities are 100% owned by the Bank. The proceeds from the issu-
ances were invested in Bank deposit notes. Each TD CaTS IV Note –
Series 1 and TD CaTS IV Note – Series 2 may be automatically
exchanged into non-cumulative Class A First Preferred Shares, Series
A10 of the Bank and each TD CaTS IV Note – Series 3 may be auto-
matically exchanged into non-cumulative Class A First Preferred Shares,
Series A11 of the Bank, in each case, without the consent of the
holders, on the occurrence of certain circumstances. On each interest
payment date in respect of which certain events have occurred, hold-
ers of TD CaTS IV Notes will be required to invest interest paid on such
TD CaTS IV Notes in a new series of non-cumulative Class A First
Preferred Shares of the Bank. Trust IV is a variable interest entity.
As the Bank is not the primary beneficiary of Trust IV, the Bank does
not consolidate it.
TD CaTS II, TD CaTS III and TD CaTS IV Notes all qualify as Tier 1
capital of the Bank.
Capital Trust Securities – Series 2009 (TD CaTS) were issued by
TD Capital Trust (Trust), a closed-end trust established under the laws
of the Province of Ontario, whose voting securities are 100% owned
by the Bank. The proceeds from the issuance were invested in trust
assets. On December 31, 2009, the Trust redeemed all of its 900,000
outstanding TD CaTS at a redemption price per unit of $1,000 plus any
unpaid distribution. TD CaTS qualified as Tier 1 capital of the Bank.
TD Capital Trust II Securities – Series 2012-1 (TD CaTS II) were issued
by TD Capital Trust II (Trust II), an open-end trust established under the
laws of the Province of Ontario, whose voting securities are 100%
owned by the Bank. The proceeds from the issuance were invested in
a Bank deposit note. Each TD CaTS II may be automatically exchanged,
without the consent of the holders, into forty non-cumulative Class A
First Preferred Shares, Series A3 (Series A3 Shares) of the Bank on the
occurrence of certain circumstances. The Series A3 Shares are convert-
ible into a variable number of the Bank’s common shares at the hold-
er’s option. Trust II is a variable interest entity. As the Bank is not the
primary beneficiary of Trust II, the Bank does not consolidate it.
TD Capital Trust III Securities – Series 2008 (TD CaTS III) were issued
by TD Capital Trust III (Trust III), a closed-end trust established under
the laws of the Province of Ontario, whose voting securities are 100%
owned by the Bank. The proceeds from the issuance were invested in
trust assets. Each TD CaTS III may be automatically exchanged, without
the consent of the holders, into forty non-cumulative Class A First
Preferred Shares, Series A9 of the Bank on the occurrence of certain
CAPITAL TRUST SECURITIES
NOTE 16
Capital Trust Securities
(millions of Canadian dollars, except as noted) Redemption Conversion
date date
Thousands Distribution/Interest Annual At the option At the option
of units payment dates yield of the issuer of the holder 2010 2009
Included in liability for capital trust securities
on the Consolidated Balance Sheet
Capital Trust Securities –Series 2009 900 June 30, Dec. 31 7.600% June 30, 2005 June 30, 2010 $ – $ 895
Included in non-controlling interests in subsidiaries
on the Consolidated Balance Sheet
TD Capital Trust III Securities – Series 2008 1,000 June 30, Dec. 31 7.243% Dec. 31, 20131 $ 986 $ 981
Deposit notes issued to Trust II and Trust IV, included
in deposits on the Consolidated Balance Sheet2
TD Capital Trust II Securities – Series 2012-1 350 June 30, Dec. 31 6.792% Dec. 31, 20071 At any time3 $ 350 $ 350
TD Capital Trust IV Notes – Series 1 550 June 30, Dec. 31 9.523%4 June 30, 20145 550 550
TD Capital Trust IV Notes – Series 2 450 June 30, Dec. 31 10.000%6 June 30, 20145 450 450
TD Capital Trust IV Notes – Series 3 750 June 30, Dec. 31 6.631%7 Dec. 31, 20145 750 750
2,100 $ 2,100 $ 2,100
1
On the redemption date and on any distribution date thereafter, Trust II or Trust III,
respectively may, with regulatory approval, redeem TD CaTS II or TD CaTS III,
respectively, in whole, without the consent of the holders.
2 TD CaTS II and TD CaTS IV Notes are not consolidated by the Bank. The deposit
notes issued to Trust II and Trust IV are reported in Deposits. See Note 12.
3 Holders may exchange each TD CaTS II for forty non-cumulative Class A First Preferred
Shares, Series A2 (Series A2 Shares) of the Bank. The Series A2 Shares are convertible
into a variable number of the Bank’s common shares at the holder’s option.
4 For the period from and including January 26, 2009 to but excluding June 30,
2019. Starting on June 30, 2019 and on every fifth anniversary thereafter, the
interest rate will be reset to the Government of Canada yield plus 10.125%.
5 On or after the redemption date, Trust IV may, with regulatory approval, redeem
the TD CaTS IV Notes - Series 1, TD CaTS IV Notes – Series 2 or TD CaTS IV Notes –
Series 3, respectively, in whole, without the consent of the holders.
6 For the period from and including January 26, 2009 to but excluding June 30,
2039. Starting on June 30, 2039 and on every fifth anniversary thereafter, the
interest rate will be reset to the Government of Canada yield plus 9.735%.
7 For the period from and including September 15, 2009 to but excluding June 30,
2021. Starting on June 30, 2021 and on every fifth anniversary thereafter, the
interest rate will be reset to the Government of Canada yield plus 4.00%.