Bank of Nova Scotia issued $250 million in subordinated debt in both the U.S. and Canadia markets on Tuesday.

The 15-year U.S. issue was priced to yield 6.31%, 83 basis U.S. Treasury note.

The 20-year Canadian-dollar-denominated issue was priced to yield 8.34%.

Proceeds will refinance outstanding debt and add to capital, a bank official said.

Debt to Be Retired

The bank on Sept. 15 will retire $200 million of 10.25% subordinated debt. The bank also has $200 million 10.15% debt that is callable later this year.

Bank of Nova Scotia chose a 15-year maturity over the more conventional 10-year one because it has a large amount of debt maturing in 10 years, the official said.

The issues will raise the bank's total capital ratio to 10.50% under Canadian guidelines.

Salomon Brothers Inc. and Scotia McLeod (USA) Inc. were co-lead managers on the U.S. issue; Scotia McLeod led the Canadian.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.