# National Bank (TSX:NA) restructuring, losses, equity issue



## gardner (Feb 13, 2014)

http://www.wsj.com/articles/national-bank-of-canada-warns-of-substantial-investment-loss-1443737614



> National Bank of Canada warned Thursday that its investment in Maple Financial Group Inc. was at risk of “substantial loss,” while also disclosing impending restructuring charges and a new share offering.


I got the new issue email from TD. They're $41.90 CDN per share for settlement October 9, 2015. A real rush.
The price this afternoon was $43.16. I would guess a re-price of the issue could be needed -- a drop of a couple % on scary news would put the market price below the new issue.


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## doctrine (Sep 30, 2011)

Very interesting. They're issuing $300M of shares; they are booking a $85M restructuring fee which seems to be somewhat unrelated to the Maple issue and will have $35M/yr savings, and Maple Financial Group seems to be a German bank under tax investigation which is on the books for $165M, which could be written down significantly and could be a max 0.13% loss in their capital ratio (which will be 9.8% after issuing shares). All in all, seems like not too big of a deal, be curious to see what the market reaction is. The share issue is only a 2% dilution, which is on average about the annual dilution due to stock compensation in a good year for one of the major banks. Below $41.60, the yield is > 5% and definitely a buy in my opinion.


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## GoldStone (Mar 6, 2011)

Maple Financial Group Inc. contributed less than 1% to National Bank’s annual net income in each of the last two years.

Not convinced about the re-price. Market prices routinely drop below the issue price. No one likes to be diluted.


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## gardner (Feb 13, 2014)

It's at $41 now, down 4.6%.


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## HaroldCrump (Jun 10, 2009)

Issue is already over-subscribed & institutional investors have lapped up well over half the offer.
I doubt small retail investors will get anything.


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## gardner (Feb 13, 2014)

I added to my position at 40.85. Should have waited. It looks like 40.60 was hit a few times.


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## blin10 (Jun 27, 2011)

gardner said:


> I added to my position at 40.85. Should have waited. It looks like 40.60 was hit a few times.


you can never catch bottom price, I added around 40.8 as well


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## CPA Candidate (Dec 15, 2013)

When you need to issue equity quickly at a discount to maintain minimum regulatory capital ratios, I don't think that is something you can just shrug off. I don't see a reason to put money here when RY and TD exist.


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## SpendLessEarnMore (Aug 7, 2013)

BNS too. Man did that get beat down from $59.08 close yesterday to $56.58.


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