Canadian Western Bank Announces Preferred Share Offering

EDMONTON, ALBERTA--(Marketwired - Jan. 31, 2014) -

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Canadian Western Bank (TSX:CWB) today announced its intent to issue $100 million of Basel III-compliant non-cumulative 5-year rate reset First Preferred Shares Series 5 (the "Series 5 Preferred Shares"). The offering will be underwritten on a bought deal basis by a syndicate led by National Bank Financial Inc. The expected closing date is February 10, 2014.

Under the terms of the offering, CWB will issue 4,000,000 Series 5 Preferred Shares at a price of $25.00 per share. CWB has also granted the underwriters an option, exercisable in whole or in part, to purchase on the same terms up to an additional 600,000 Series 5 Preferred Shares at any time up to two business days prior to closing. Should the underwriters choose to exercise this option in full, the maximum gross proceeds raised under the offering will be $115 million.

Holders of the Series 5 Preferred Shares will be entitled to receive a non-cumulative fixed dividend in the amount of $1.10 annually, payable quarterly, as and when declared by the Board of Directors of CWB, for the initial period ending April 30, 2019. The quarterly dividend represents an annual yield of 4.40% based on the stated issue price per share. Thereafter, the dividend rate will reset every five years at a level of 276 basis points over the then 5-year Government of Canada bond yield. CWB maintains the right to redeem, subject to the approval of the Office of the Superintendent of Financial Institutions ("OSFI"), up to all of the then outstanding Series 5 Preferred Shares on April 30, 2019, and on April 30 every five years thereafter at a price of $25.00 per share.

Should CWB choose not to exercise its right to redeem the Series 5 Preferred Shares, holders of these shares will have the right to convert their shares into an equal number of Basel III-compliant non-cumulative floating rate First Preferred Shares Series 6 (the "Series 6 Preferred Shares"), subject to certain conditions, on April 30, 2019, and on April 30 every five years thereafter. Holders of the Series 6 Preferred Shares will be entitled to receive quarterly floating dividends, as and when declared by the Board of Directors of CWB, equal to the 90-day Government of Canada Treasury Bill rate plus 276 basis points.

Net proceeds from the offering will be used for general corporate purposes and are expected to qualify as Tier 1 capital for CWB. This offering is made pursuant to the terms outlined in the prospectus supplement to CWB's January 30, 2014 base shelf prospectus that will subsequently be filed. CWB will make an application to list the Series 5 Preferred Shares on the Toronto Stock Exchange as of the expected closing date.

Subject to the approval of OSFI, CWB intends to redeem the currently outstanding non-cumulative 5-year rate reset First Preferred Shares Series 3 on April 30, 2014 in accordance with the terms of such shares.

The Series 5 Preferred Shares and Series 6 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 and applicable state securities laws. This press release shall not constitute an offer to sell or a solicitation of an offer to buy securities in the United States.

About Canadian Western Bank Group

Canadian Western Bank offers a full range of business and personal banking services across the four western provinces and is the largest publicly traded Canadian bank headquartered in Western Canada. The Bank, along with its operating affiliates, National Leasing, Canadian Western Trust, Canadian Direct Insurance, Valiant Trust, Adroit Investment Management, McLean & Partners, and Canadian Western Financial, collectively offer a diversified range of financial services across Canada and are together known as the Canadian Western Bank Group. The common shares of Canadian Western Bank are listed on the Toronto Stock Exchange under the trading symbol "CWB". The Bank's Series 3 Preferred Shares trade on the Toronto Stock Exchange under the trading symbol "CWB.PR.A". Refer to www.cwb.com for additional information.