TD Bank 2003 Annual Report Download - page 70

TD BANK FINANCIAL GROUP ANNUAL REPORT 2003 • Financial Results68
(millions of dollars) 2003 2002
Trust units issued by TD Capital Trust
900,000 Capital Trust Securities – Series 2009 $ 900 $ 900
Trust units issued by TD Capital Trust II
350,000 Capital Trust Securities – Series 2012 350 350
$1,250 $ 1,250
TD Capital Trust Securities – Series 2009
The TD Capital Trust Securities (TD CaTS) are issued by
TD Capital Trust, whose voting securities are owned 100% by
the Bank. Holders of TD CaTS are eligible to receive semi-annual
non-cumulative fixed cash distributions of $38 per TD CaTS.
Should the trust fail to pay the semi-annual distributions in full,
the Bank’s ability to declare dividends on Bank common and
preferred shares would be restricted.
Between June 30, 2005 and December 31, 2009, the trust has
the option of redeeming the outstanding TD CaTS for the greater
of: (a) $1,000 together with unpaid distributions to the date of
redemption and (b) a price calculated to provide an annual yield
equal to the yield of a Government of Canada bond maturing on
December 31, 2009 at that time plus .38% together with unpaid
distributions to the date of redemption. In the event of an
unfavourable change in tax or capital treatment as it applies to
the trust prior to June 30, 2005, the trust may redeem the out-
standing TD CaTS for a redemption price as calculated above. On
or after December 31, 2009, the redemption price would be
$1,000 together with unpaid distributions to the date of redemp-
tion. Such redemption rights are subject to the approval of the
Superintendent of Financial Institutions Canada.
On or after June 30, 2010, each TD CaTS may, at the option of
the holder, be converted semi-annually into one Non-cumulative
Class A Redeemable First Preferred Share of the Bank. By giving
at least 60 days of notice prior to the date of conversion to all
holders who have given a conversion notice, the Bank may
redeem or find substitute purchasers at the purchase price of
$1,000 per TD CaTS together with unpaid distributions to the
date of conversion.
Each TD CaTS may be automatically exchanged into one pre-
ferred share of the Bank without consent of the holder in the
following circumstances: (a) proceedings are commenced for
the winding-up of the Bank; (b) the Superintendent of Financial
Institutions Canada takes control of the Bank; (c) the Bank has
Tier 1 capitalization of less than 5% or a Total Capital ratio of
less than 8%; or (d) the Bank has failed to comply with a direc-
tion of the Superintendent of Financial Institutions Canada to
increase its capital or provide additional liquidity.
The distribution rate on the trust securities is 7.60% per annum.
TD Capital Trust Securities – Series 2012
The TD Capital Trust Securities (TD CaTS II) are issued by
TD Capital Trust II, whose voting securities are owned 100%
by the Bank. Holders of TD CaTS II are eligible to receive semi-
annual non-cumulative fixed cash distributions of $33.96 per
TD CaTS II. Should the trust fail to pay the semi-annual distribu-
tions in full, the Bank’s ability to declare dividends on Bank
common and preferred shares would be restricted. The proceeds
from the issuance were invested in Bank deposits.
Between December 31, 2007 and December 31, 2012, the
trust has the option of redeeming the outstanding TD CaTS II for
the greater of: (a) $1,000 together with unpaid distributions to
the date of redemption and (b) a price calculated to provide an
annual yield equal to the yield of a Government of Canada bond
maturing on December 31, 2012 at that time plus .38% together
with unpaid distributions to the date of redemption. In the event
of an unfavourable change in tax or capital treatment as it
applies to the trust prior to December 31, 2012, the trust may
redeem the outstanding TD CaTS II for a redemption price as cal-
culated above. On or after December 31, 2012, the redemption
price would be $1,000 together with unpaid distributions to the
date of redemption. Such redemption rights are subject to the
approval of the Superintendent of Financial Institutions Canada.
At any time, each TD CaTS II may, at the option of the holder,
be converted into 40 Non-cumulative Class A Redeemable First
Preferred Shares, Series A2 of the Bank. Prior to the conversion,
provided the holder has not withheld consent, the Bank may find
substitute purchasers at a purchase price not less than 90% of
the closing price of the TD CaTS II.
Each TD CaTS II may be automatically exchanged into 40
Non-cumulative Class A Redeemable First Preferred Shares, Series
A3 of the Bank without consent of the holder subject to events
similar to those described for TD CaTS –(Series 2009).
The distribution rate on the trust securities is 6.792% per
annum. No Non-cumulative Class A Redeemable First Preferred
Shares, Series A2 or Series A3 have been issued as at October 31,
2003. If issued, these shares would have dividend rates of 4.40%
and 5.15%, respectively.
NOTE 11 Non-controlling interest in subsidiaries
Repayment schedule
The aggregate maturities of the Bank’s subordinated notes
and debentures are as follows:
(millions of dollars) 2003 2002
Within 1 year $ 157 $ 229
Over 1 to 2 years 5157
Over 4 to 5 years 396 –
Over 5 years 5,329 3,957
$5,887 $4,343