National Bank of Canada Announces Preferred Share Offering

MONTREAL, QUEBEC--(Marketwired - Jan. 29, 2014) -

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

National Bank of Canada (TSX:NA) ("National Bank") today announced that it has entered into an agreement with a group of underwriters led by National Bank Financial Inc. for an issue on a bought deal basis of 8 million Basel III-compliant non-cumulative 5-year rate reset first preferred shares series 30 (the "Series 30 Preferred Shares"), at a price of $25.00 per share, to raise gross proceeds of $200 million.

National Bank has also granted the underwriters an option to purchase, on the same terms, up to an additional 2 million Series 30 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 maximum gross proceeds raised under the offering will be $250 million should this option be exercised in full.

The Series 30 Preferred Shares will yield 4.10% annually, payable quarterly, as and when declared by the Board of Directors of National Bank, for the initial period ending May 15, 2019. The first of such dividends, if declared, shall be payable on May 15, 2014. Thereafter, the dividend rate will reset every five years at a level of 240 basis points over the then 5-year Government of Canada bond yield. Subject to regulatory approval, National Bank may redeem the Series 30 Preferred Shares in whole or in part at par on May 15, 2019 and on May 15 every five years thereafter.

Holders of the Series 30 Preferred Shares will have the right to convert their shares into an equal number of non-cumulative floating rate first preferred shares Series 31 (the "Series 31 Preferred Shares"), subject to certain conditions, on May 15, 2019, and on May 15 every five years thereafter. Holders of the Series 31 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 240 basis points.

The net proceeds of the offering will be used for general corporate purposes and are expected to qualify as Tier 1 capital for National Bank. The expected closing date is on or about February 7, 2014. National Bank intends to file in Canada a prospectus supplement to its October 5, 2012 base shelf prospectus in respect of this issue.

The Series 30 Preferred Shares and Series 31 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.

About National Bank of Canada

With $188 billion in assets as at October 31, 2013, National Bank of Canada (www.nbc.ca), together with its subsidiaries, forms one of Canada's leading integrated financial groups, and was named among the 20 strongest banks in the world by Bloomberg Markets magazine. The Bank has close to 20,000 employees and is widely recognized as a top employer. Its securities are listed on the Toronto Stock Exchange (TSX:NA). Follow the Bank's activities via social media and learn more about its extensive community involvement at clearfacts.ca and commitment.nationalbank.ca.