National Bank of Canada Announces NVCC Preferred Share Offering

MONTREAL, QUEBEC--(Marketwired - June 1, 2017) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

National Bank of Canada ("National Bank") (TSX:NA) today announced that it has entered into an agreement with a group of underwriters led by National Bank Financial Inc. for the issuance on a bought deal basis of 12 million non-cumulative 5-year rate reset first preferred shares series 38 (non-viability contingent capital (NVCC)) (the "Series 38 Preferred Shares") at a price of $25.00 per share, to raise gross proceeds of $300 million.

National Bank has granted the underwriters an option to purchase, on the same terms, up to an additional 4 million Series 38 Preferred Shares. This option is exercisable in whole or in part by the underwriters at any time up to two business days prior to closing. The gross proceeds raised under the offering will be $400 million should this option be exercised in full.

The Series 38 Preferred Shares will yield 4.45% annually, payable quarterly, as and when declared by the Board of Directors of National Bank, for the initial period ending November 15, 2022. The first of such dividends, if declared, shall be payable on November 15, 2017. Thereafter, the dividend rate will reset every five years at a level of 343 basis points over the then 5-year Government of Canada bond yield. Subject to regulatory approval, National Bank may redeem the Series 38 Preferred Shares in whole or in part at par on November 15, 2022 and on November 15 every five years thereafter.

Holders of the Series 38 Preferred Shares will have the right to convert their shares into an equal number of non-cumulative floating rate first preferred shares series 39 (non-viability contingent capital (NVCC)) (the "Series 39 Preferred Shares"), subject to certain conditions, on November 15, 2022, and on November 15 every five years thereafter. Holders of the Series 39 Preferred Shares will be entitled to receive quarterly floating dividends, as and when declared by the Board of Directors of National Bank, equal to the 90-day Government of Canada Treasury Bill rate plus 343 basis points.

The net proceeds of the offering will be used for general corporate purposes and added to National Bank's capital base. The expected closing date is on or about June 13, 2017. National Bank intends to file in Canada a prospectus supplement to its November 21, 2016 base shelf prospectus in respect of this issue.

The Series 38 Preferred Shares and Series 39 Preferred Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or under any state securities laws, and may not be offered, sold, directly or indirectly, or delivered within the United States of America and its territories and possessions or to, or for the account or benefit of, United States persons except in certain transactions exempt from the registration requirements of such Act. This press release shall not constitute an offer to sell or a solicitation to buy securities in the United States.

Caution Regarding Forward-Looking Statements

This press release includes certain forward-looking statements. These statements are inherently subject to significant risks, uncertainties and changes in circumstances, many of which are beyond the control of the Bank. Except as required by law, the Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time, by it or on its behalf. The forward-looking information contained in this press release is presented for the purpose of interpreting the information contained herein and may not be appropriate for other purposes.

About National Bank of Canada

With $239 billion in assets as at April 30, 2017, National Bank of Canada, together with its subsidiaries, forms one of Canada's leading integrated financial groups. The Bank has more than 21,000 employees and is widely recognized as a top employer. The Bank's securities are listed on the Toronto Stock Exchange (TSX:NA). Follow the Bank's activities at nbc.ca or via social media such as Facebook, LinkedIn and Twitter.