TD Bank 2011 Annual Report Download - page 125

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TD BANK GROUP ANNUAL REPORT 2011 FINANCIAL RESULTS 123
LIABILITY FOR PREFERRED SHARES
NOTE 15
The Bank classifies preferred shares that are mandatorily redeemable
or convertible into a variable number of the Bank’s common shares at
the holder’s option, as liabilities for reporting purposes. Dividend
payments on these preferred shares are recorded in interest expense.
Preferred shares that are not mandatorily redeemable or that are
not convertible into a variable number of the Bank’s common shares at
the holder’s option, are not classified as liabilities and are presented
in Note 18.
Liability for Preferred Shares Issued and Outstanding
(millions of shares and millions of Canadian dollars) 2011 2010
Number of shares Amount Number of shares Amount
Class A Preferred shares
Series M – $ – 14.0 $ 350
Series N – – 8.0 200
REIT Preferred Stock
Series 2000A –1 27 –1 27
Series 2002C –2 5 –2 5
Total $ 32 22.0 $ 582
1 263 shares issued and outstanding.
2 55 shares issued and outstanding.
PREFERRED SHARES
Class A First Preferred Shares, Series M
The Series M shares were entitled to quarterly non-cumulative cash
dividends, if declared, at a per annum rate of 4.70% per Series M
share. The Series M shares were redeemable by the Bank, subject
to regulatory consent, by payment in cash of $26.00 per share if
redeemed on or after April 30, 2009, and at a declining premium to
a price of $25.00 per share if redeemed on or after April 30, 2013.
The Series M shares were not redeemable at the option of the holder.
On October 31, 2011, the Bank redeemed all of its 14 million
outstanding Class A First Preferred Shares, Series M at the price per
share of $25.50 (representing a $0.50 premium to the $25.00 per
share face price, recorded in interest expense) for an aggregate total
of approximately $357 million. The Series M shares qualified as Tier 1
capital of the Bank.
Class A First Preferred Shares, Series N
The Series N shares were entitled to quarterly non-cumulative cash
dividends, if declared, at a per annum rate of 4.60% per Series N
share. The Series N shares were redeemable by the Bank, subject to
regulatory consent, by payment in cash of $26.00 per share if redeemed
on or after April 30, 2009, and at a declining premium to a price of
$25.00 per share if redeemed on or after April 30, 2013. The Series N
shares were not redeemable at the option of the holder.
On October 31, 2011, the Bank redeemed all of its 8 million out -
standing Class A First Preferred Shares, Series N at the price per share
of $25.50 (representing a $0.50 premium to the $25.00 per share
face price, recorded in interest expense) for an aggregate total of
approximately $204 million. The Series N shares qualified as Tier 1
capital of the Bank.
REIT PREFERRED STOCK
REIT Preferred Stock, Series 2000A
A real estate investment trust, Carolina First Mortgage Loan Trust
(Carolina First REIT), a subsidiary of TD Bank, N.A., issued the Series A
preferred stock (Series 2000A shares). The Series 2000A shares are
entitled to quarterly cumulative cash dividends, if declared, at a per
annum rate of 11.125% per Series 2000A share. The Series 2000A
shares are unsecured and mandatorily redeemable by Carolina First
REIT on January 31, 2031. Each Series 2000A share may be auto-
matically exchanged, without the consent of the holders, into a newly
issued share of Series A preferred stock of TD Bank, N.A. on the
occurrence of certain circumstances. The Series 2000A shares qualify
as Tier 2 capital of the Bank.
REIT Preferred Stock, Series 2002C
Carolina First REIT issued the Series C preferred stock (Series 2002C
shares). The Series 2002C shares are entitled to quarterly cumulative
cash dividends, if declared, at a variable rate equal to the three month
London Interbank Offer Rate (LIBOR) plus 3.50% per Series 2002C
share. The Series 2002C shares are unsecured and mandatorily redeem-
able by Carolina First REIT on May 31, 2012. Each Series 2002C
share
may be automatically exchanged, without the consent of the holders,
into a newly issued share of Series C preferred stock of TD Bank, N.A.
on the occurrence of certain circumstances.