TD Bank 2012 Annual Report Download - page 143

TD BANK GROUP ANNUAL REPORT 2012 FINANCIAL RESULTS 141
CAPITAL TRUST SECURITIES
NOTE 19
The Bank issues innovative capital securities through special purpose
entities. The Bank consolidates these special purpose entities and their
securities are reported on the Consolidated Balance Sheet as either
liability for capital trust securities or non-controlling interests in subsid-
iaries. The securities all qualify as Tier 1 capital of the Bank.
On October 22, 2002, TD Capital Trust II (Trust II) issued TD Capital
Trust II Securities – Series 2012-1 (TD CaTS II). 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 events. The Series
A3 Shares are convertible into a variable number of the Bank’s
common shares at the holder’s option.
On September 17, 2008, TD Capital Trust III (Trust III), a closed-end
trust, issued TD Capital Trust III Securities – Series 2008 (TD CaTS III).
The proceeds from the issuance were invested in trust assets purchased
from the Bank. 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 events.
On January 26, 2009, TD Capital Trust IV (Trust IV) issued TD Capital
Trust IV Notes – Series 1 due June 30, 2108 (TD CaTS IV-1) and TD
Capital Trust IV Notes – Series 2 due June 30, 2108 (TD CaTS IV-2) and
on September 15, 2009, issued TD Capital Trust IV Notes – Series 3
due June 30, 2108 (TD CaTS IV-3, and collectively TD CaTS IV Notes).
The proceeds from the issuances were invested in Bank deposit notes.
Each TD CaTS IV-1 and TD CaTS IV Note-2 may be automatically
exchanged into non-cumulative Class A First Preferred Shares,
Series A10 of the Bank and each TD CaTS IV-3 may be automatically
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 events. On each interest payment
date in respect of which certain events have occurred, holders 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.
On June 15, 2007, South Financial Capital Trust 2007-I (SF Trust I),
a statutory trust established under the laws of the State of Delaware,
issued South Financial Capital Trust 2007-I Capital Securities due
September 1, 2037 (SFCT 2007-I). Under certain circumstances,
payment of distributions may be deferred for up to 20 consecutive
quarterly periods. Under certain circumstances, such as the liquidation
of SF Trust I, debentures issued by TD Bank US Holding Company (the
“Company”) and currently held by SF Trust I may be delivered to the
holders of the SFCT 2007-I.
On August 28, 2007, South Financial Capital Trust 2007-II (SF Trust II),
a statutory trust established under the laws of the State of Delaware,
issued South Financial Capital Trust 2007-II Preferred Securities due
October 30, 2037 (SFCT 2007-II). Under certain circumstances,
payment of distributions may be deferred for up to 20 consecutive
quarterly periods. Under certain circumstances, such as the liquidation
of SF Trust II, debentures issued by the Company and currently held
by SF Trust II may be delivered to the holders of the SFCT 2007-II.
On August 28, 2007, South Financial Capital Trust 2007-III
(SF Trust III), a statutory trust established under the laws of the State
of Delaware, issued South Financial Capital Trust 2007-III Capital
Securities due September 15, 2037 (SFCT 2007-III). Under certain
circumstances, payment of distributions may be deferred for up to
20 consecutive quarterly periods. Under certain circumstances, such
as the liquidation of SF Trust III, debentures issued by the Company
and currently held by SF Trust III may be delivered to the holders
of the SFCT 2007-III.
Liability for Preferred Shares Issued and Outstanding
(millions of shares and millions of Canadian dollars) October 31, 2012 October 31, 2011 November 1, 2010
Number of shares Amount Number of shares Amount Number of shares Amount
Class A Preferred shares
Series M1 – $ – – $ – 14.0 $ 350
Series N2 – – – – 8.0 200
REIT Preferred Stock
Series 2000A3 – 26 – 27 – 27
Series 2002C4 – – – 5 – 5
Total – $ 26 – $ 32 22.0 $ 582
1
On October 31, 2011, the Bank redeemed all outstanding Series M preferred
shares at $25.50 per share (representing a $0.50 premium to the $25.00 per share
face price, recorded in interest expense) for an aggregate total of $357 million.
The Series M shares qualified as Tier 1 capital of the Bank.
2
On October 31, 2011, the Bank redeemed all outstanding Series N preferred
shares at $25.50 per share (representing a $0.50 premium to the $25.00 per share
face price, recorded in interest expense) for an aggregate total of $204 million.
The Series N shares qualified as Tier 1 capital of the Bank.
3
As at October 31, 2012, 263 shares were outstanding (October 31, 2011 – 263;
November 1, 2010 – 263).
4
On May 31, 2012, Carolina First REIT redeemed all of its outstanding Series 2002C
Cumulative Fixed Rate Preferred Shares at par. As at October 31, 2011, 55 shares
were outstanding (November 1, 2010 – 55).
REIT PREFERRED STOCK
REIT Preferred Stock, Series 2000A Cumulative Fixed Rate
Preferred Shares
A real estate investment trust, Carolina First Mortgage Loan Trust
(Carolina First REIT), a subsidiary of TD Bank, N.A., issued the Series
2000A Cumulative Fixed Rate Preferred Shares (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, subject to
receipt of any necessary regulatory consents. Each Series 2000A share
may be automatically exchanged, without the consent of the holders,
into a newly issued share of Series 2000A Cumulative Fixed Rate
Preferred Stock of TD Bank, N.A. on the occurrence of certain events.
The Series 2000A shares qualify as Tier 2 capital of the Bank.