Royal Bank of Canada announces common share offering
TORONTO, December 8, 2008 — Royal Bank of Canada
(RY on TSX and NYSE) today announced it has entered into an
underwriting agreement with a syndicate of underwriters for
the sale of 56,750,000 common shares at $35.25 per share for
total gross proceeds of $2.0 billion. The offering is expected
to close on December 22, 2008.
The bank has also granted to the underwriters an over-allotment
option to purchase, on the same terms, up to a further 8,512,500
common shares. The option is exercisable, in whole or in part,
up to 30 days after the closing. The maximum gross proceeds
raised under the offering will be $2.3 billion if the option
is exercised in full.
The purpose of the issue is to further supplement the bank's
capital position and provide flexibility to continue to invest
in our existing businesses where we are able to generate attractive
returns. The issue will qualify as Tier 1 capital and net
proceeds will be used for general business purposes.
As announced on December 5, 2008, the bank's Tier 1 capital
ratio was 9% as of October 31, 2008. Earlier this fiscal quarter,
we issued $525 million of Series AL and Series AN Preferred
Shares. On a pro forma basis, adjusting for the issue of Series
AL and Series AN Preferred Shares and this issue of common
shares, the bank expects its Tier 1 capital ratio will be
approximately 9.9%, or 10.1% if the over-allotment option
is exercised in full.
The common shares will be issued by way of short form prospectus
to be filed with securities regulatory authorities in each
province and territory of Canada.
The common shares have not been and will not be registered
under the U.S. Securities Act of 1933, as amended (the "U.S.
Securities Act"), and may not be offered or sold in the
United States absent registration or an applicable exemption
from registration requirements of the U.S. securities Act.
The press release shall not constitute an offer to sell or
the solicitation of an offer to buy such common shares in
the United States or in any other jurisdiction where such
offer is unlawful.
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For further information, please contact:
VP & Head, Investor Relations, (416) 955-7803, firstname.lastname@example.org
VP & Head, Corporate Communications, (416) 974-6286, email@example.com
Caution Regarding Forward-Looking Statements
From time to time, we make written or
oral forward-looking statements within the meaning of certain
securities laws, including the "safe harbour" provisions
of the United States Private Securities Litigation Reform
Act of 1995 and any applicable Canadian securities legislation.
We may make forward-looking statements in this news release,
in other filings with Canadian regulators or the United States
Securities and Exchange Commission, in reports to shareholders
and in other communications. Forward-looking statements include,
but are not limited to, statements relating to our expected
Tier 1 capital ratio, our medium-term objectives, our strategic
goals and priorities, and the economic and business outlook
for us, for each of our business segments and for the Canadian,
United States and international economies. The forward-looking
information contained in this news release is presented for
the purpose of assisting our securityholders and financial
analysts in understanding our financial position and results
of operations as at and for the periods ended on the dates
presented and our strategic priorities and objectives, and
may not be appropriate for other purposes. Forward-looking
statements are typically identified by words such as "believe",
"expect", "forecast", "anticipate",
"intend", "estimate", "goal",
"plan" and "project" and similar expressions
of future or conditional verbs such as "will", "may",
"should", "could", or "would".
By their very nature, forward-looking statements require
us to make assumptions and are subject to inherent risks and
uncertainties, which give rise to the possibility that our
predictions, forecasts, projections, expectations or conclusions
will not prove to be accurate, that our assumptions may not
be correct and that our objectives, strategic goals and priorities
will not be achieved. We caution readers not to place undue
reliance on these statements as a number of important factors
could cause our actual results to differ materially from the
expectations expressed in such forward-looking statements.
These factors include credit, market, operational, liquidity
and funding risks, and other risks discussed in our 2008 Management's
Discussion and Analysis; the impact of the market environment,
including the impact of the continuing volatility in the financial
markets and lack of liquidity in credit markets, and our ability
to effectively manage our liquidity and our capital ratios
and implement effective risk management procedures; general
business and economic conditions in Canada, the United States
and other countries in which we conduct business; changes
in accounting standards, policies and estimates, including
changes in our estimates of provisions, allowances and valuations;
the impact of the movement of the Canadian dollar relative
to other currencies, particularly the U.S. dollar, British
pound and Euro; the effects of changes in government fiscal,
monetary and other policies; the effects of competition in
markets in which we operate; the impact of changes in laws
and regulations, including tax laws; judicial or regulatory
judgments and legal proceedings; the accuracy and completeness
of information concerning our clients and counterparties;
our ability to successfully execute our strategies and to
complete and integrate strategic acquisitions and joint ventures
successfully; changes to our credit ratings; and development
and integration of our distribution networks.
We caution that the foregoing list of important factors is
not exhaustive and other factors could also adversely affect
our results. When relying on our forward-looking statements
to make decisions with respect to us, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events. Except as required by
law, we do not undertake to update any forward-looking statement,
whether written or oral, that may be made from time to time
by us or on our behalf.
Additional information about these and other factors can
be found in the Risk, capital and liquidity management, Overview
of other risks and Additional factors that may affect future
results sections of our 2008 Annual Report.