First National’s capital structure includes Class A Series 1 and Class A Series 2 Preference Shares.
Series 1 shareholders are entitled to receive cumulative fixed rate preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of First National. The fixed dividend rate for the five-year period commencing on April 1, 2016, and ending on March 31, 2021 is 2.79%.
Series 2 shareholders are entitled to receive floating rate cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of First National. The floating rate resets quarterly based on the 90-day Canadian Treasury Bill plus 2.07% on an actual/365 day count basis, subject to certain adjustments in accordance with the terms of the Series 2 Preference Shares. The current floating rate dividend amount can be found under Press Releases.
Items of note:
- Trading symbol: FN.PR.A (Series 1) and FN.PR.B (Series 2)
- Issue price and par value: $25 per share.
- Current price Series 1: Click here
- Current price Series 2: Click here
- Payment frequency: Quarterly on or about the 15th of April, July, October and January.
- Series 1 dividend per share: During the current fixed rate period (April 1, 2016 to March 31, 2021) at an annualized rate of $0.6975.
- Series 1 subsequent fixed rate period: April 1, 2021 through March 31, 2026 and for each succeeding subsequent fixed rate period. Revie the prospectus for more details
- Series 1 subsequent fixed dividend rate: The annual fixed dividend rate for each subsequent fixed rate period will be equal to the sum of the Government of Canada Yield on the 30th day prior to the first day of such Subsequent Fixed Rate Period plus 2.07%.
- Conversion to Series 2 preferred shares: Holders of Series 1 will have the right, at their option, on March 31, 2021 and every five years thereafter to convert, subject to certain restrictions, their Series 1 shares into Series 2 shares on a one-to-one basis.
- Series 2 features: The holders of the Series 2 shares will be entitled to receive floating rate cumulative cash dividends following declaration by our Board of Directors, payable quarterly. The floating quarterly dividend rate for Series 2 will be rest quarterly and equal the sum of the T-Bill Rate on the Floating Rate Calculation Date plus 2.07% (calculated on the basis of the actual number of days elapsed in such Quarterly Floating Rate Period divided by 365). Holders of Series 2, will have the right, at their option, on March 31, 2021 and every five years thereafter to convert, subject to certain restrictions, their Series 2 shares into Series 1 shares on a one-to-one basis
- Interest rate fluctuations: Prevailing yields on similar securities will affect the market value of Series 1 shares and Series 2 shares. Assuming all other factors remain unchanged, the market value would be expected to decline as prevailing yields for similar securities rise and would be expected to increase as prevailing yields for similar securities decline. Spreads over the Government of Canada bond yield, T-Bill rate and comparable benchmark rates of interest for similar securities will also affect the market value in a similar manner.
- Redemption: Our Series 1 and Series 2 shares do not have fixed maturity dates and are not redeemable at the option of the holders.
- Priority: In the event of liquidation or dissolution, Series 1 and Series 2 shareholders will be entitled to receive $25.00 per Series 1 and Series 2 shares before any amount is paid or any assets of the Corporation are distributed to the holders of any shares ranking junior to Series 1 and Series 2.
- Voting rights: Holders of Series 1 and Series 2 are not entitled to vote at any meeting of shareholders of First National unless the Company fails to pay eight quarterly preferred share dividends or unless a special meeting of the preferred shareholders is called.
- Tax treatment: Dividends (including deemed dividends) received on Series 1 shares or the Series 2 shares by an individual (other than certain trusts) will be included in the individual’s income and will be subject to the gross-up and dividend tax credit rules applicable to taxable dividends received from taxable Canadian corporations. Please consult your personal tax advisor for specific tax advice.
- Tax treatment on dispositions: A holder who disposes of, or is deemed to dispose of, Series 1 or Series 2 shares (either on redemption of the shares for cash or otherwise, but not on a conversion) will generally realize a capital gain/loss to the extent that the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of such shares to the holder. Please consult your personal tax advisor for specific tax advice.