A syndicate of agents led by RBC Capital Markets complete C$1.75B public offering of non-viability contingent capital Additional Tier 1 Limited Recourse Capital Notes, Series 2
On November 2, 2020, a syndicate of agents led by Royal Bank of Canada completed a C$1.75 billion public offering of non-viability contingent capital Additional Tier 1 Limited Recourse Capital Notes, Series 2.
The LRCNs will bear interest at a rate of 4.00 per cent annually, payable semi-annually, for the initial period ending February 24, 2026. Thereafter, the interest rate on the LRCNs will reset every five years at a rate equal to the prevailing 5-year Government of Canada Yield plus 3.617 per cent. The LRCNs will mature on February 24, 2081. RBC Capital Markets is acting as lead agent on the issue.
Concurrently with the issuance of the LRCNs, the bank will issue NVCC Non-Cumulative 5-Year Fixed Rate Reset First Preferred Shares, Series BR (“Preferred Shares Series BR”) to be held by Computershare Trust Company of Canada as trustee for Leo LRCN Limited Recourse Trust (the “Limited Recourse Trust”). In case of non-payment of interest on or principal of the LRCNs when due, the recourse of each LRCN holder will be limited to that holder’s proportionate share of the Limited Recourse Trust’s assets, which will consist of Preferred Shares Series BR except in limited circumstances.
McCarthy Tétrault advised a syndicate of agents led by Royal Bank of Canada with a team led by Andrew Parker and Jo-Anna Brimmer that included Barry Ryan, Suzie Cusson (Business), and Gabrielle Richards and Kabir Jamal (Tax).
