(November 7 – 16:25 ET) – TD Bank has unveiled plans to streamline its governance and capital structure subsequent to the acquisition of the Canada Trust group of companies.

Following the acquisition of Canada Trust, TD had three reporting issuers: TD Bank, Canada Trust Financial Services (CTFS), Inc. and Canada Trustco Mortgage Company (“CTMC”). Currently, preferred shares of both CTFS and CTMC are outstanding, as well as capital debentures issued by CTMC.

While TD Bank is widely held with a significant number of investors, the bank says CTFS and CTMC together had few remaining securities holders. Accordingly, investors in CTFS and CTMC suffer from a lack of liquidity compared to investments in TD Bank securities. As a result, TD is initiating three transactions that would serve to address this issue.

Shareholders of CTFS’s Non-cumulative First Preferred Shares, Series 4 and Series 5 will vote on December 4, 2000 to amend the terms and conditions of their shares to permit the exchange of their holdings for Non-cumulative Redeemable Class A First Preferred Shares, Series K and Series L, respectively, of TD Bank.

The preferred shares of TD Bank will have terms and conditions substantially the same in all material respects as the corresponding series of CTFS preferred shares. However, on and after August 1, 2003, the provisions of the bank preferred shares will have a conversion feature at the option of the holder into TD Bank common stock.

In a separate vote on December 4, debenture holders of CTMC’s 10.05% Capital Debentures, Series 2 and 9.15% Capital Debentures, Series 3 will consider amending the terms and conditions of their debentures to permit the exchange of their holdings for 10.05% Debentures due August 4, 2014 and 9.15% Debentures due May 26, 2025, respectively, of TD Bank. The bank’s debentures will have terms and conditions substantially the same in all material respects as the corresponding series of CTMC debentures.

Finally, CTMC will exercise its right to redeem all of its outstanding Non-Cumulative Redeemable Third Preference Shares, Series 1 (“Series 1 Preference Shares”). In accordance with the provisions attached to the Series 1 Preference Shares, they will be redeemed for cash on December 31, 2000 at the price of $25 a share for an aggregate of $150 million. The quarterly dividend payable on December 31, 2000 will be paid in the usual manner.

After December 31, the bank says the Series 1 Preference Shares will cease to be entitled to dividends and the holders of such shares will not be entitled to exercise any right in respect thereof except that of receiving the redemption price and the dividend referred to above.

Subsequent to the successful completion of these transactions, TD Bank intends to make application to the appropriate Canadian securities authorities for orders that CTFS and CTMC cease to be reporting issuers for Canadian securities regulatory purposes.
-IE Staff