Just one day after Canadian Western Bank secured its first debt rating, the bank was in the market issuing $300-million of subordinated notes, $75-million of which was designated for retail players.
The 10-year notes yield 4.389 per cent and priced at 200 basis points above 5-year Canada bonds. After the first five years, the notes will float at a spread over the Canadian Dealer Offered Rate (CDOR), but CWB can also redeem them at that point.
CWB had been in discussions with DBRS Ltd. for years and finally applied for a rating in 2010, which resulted in a new BBB (high) rating on its subordinated debt this week. It's a big step forward because many portfolio managers are restricted from buying any unrated product.
RBC Dominion Securities and National Bank Financial are co-lead underwriters.