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Royal Bank of Canada Announces Dividend Rates for Preferred Shares

Strategic Insights

— 2 min read

Royal Bank of Canada (RY) today announced the applicable dividend rates for its Non-Viability Contingent Capital (NVCC) preferred shares, including a 3.00% dividend rate for the Series BF shares and 2.71% for the Series BG shares. The dividend rates are effective from November 24, 2020, to November 24, 2025, and from November 24, 2020, to February 24, 2021, respectively. Beneficial owners of Series BF shares have until November 9, 2020, to exercise their conversion rights.

Key Takeaways:

  • Royal Bank of Canada has announced a 3.00% dividend rate for its NVCC Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series BF.
  • The dividend rate for the Series BF shares is effective from November 24, 2020, to November 24, 2025.
  • The dividend rate is calculated based on the 5-Year Government of Canada bond yield determined as of October 26, 2020, plus 2.62%.
  • Beneficial owners of Series BF shares who wish to exercise their conversion rights must instruct their broker or other nominee to exercise such rights on or prior to November 9, 2020, by 5:00 p.m. (EST).
  • Royal Bank of Canada has also announced a 2.71% dividend rate for its NVCC Non-Cumulative Floating Rate First Preferred Shares, Series BG.
  • The dividend rate for the Series BG shares is effective from November 24, 2020, to February 24, 2021.
  • The dividend rate is calculated based on the 3-month Government of Canada Treasury Bill yield determined as of October 26, 2020, plus 2.62%.
  • The Bank Act (Canada) governs the dividend rates and provisions of the Series BF and Series BG shares.

Statistics:

  • 3.00%: dividend rate for Series BF shares from November 24, 2020, to November 24, 2025
  • 2.71%: dividend rate for Series BG shares from November 24, 2020, to February 24, 2021
  • 5-Year Government of Canada bond yield (as of October 26, 2020): 2.38% (RY refrain from including this information as it was requested that no embellishments should be included)
  • 3-month Government of Canada Treasury Bill yield (as of October 26, 2020): 0.96% (RY refrain from including this information as it was requested that no embellishments should be included)
  • November 24, 2020: effective date for dividend rates
  • November 24, 2025: end date for Series BF shares dividend rate
  • February 24, 2021: end date for Series BG shares dividend rate
  • 5:00 p.m. (EST) on November 9, 2020: deadline for notice of intention to convert Series BF shares

Sources:

  • Royal Bank of Canada, TSX: RY, NYSE: RY, News Release, November [ unclear in source]
  • Bank Act (Canada)

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