TD
Bank Financial Group Discloses Hedge Arrangement for
TD
Ameritrade Common Stock
TORONTO,
ON September 14 2006 - TD Bank Financial Group (TDBFG) today announced
that it
has entered into an arrangement that could provide TDBFG a financial hedge
for
potential future purchases of TD Ameritrade Holding Corp. common stock
(NASDAQ:AMTD).
Pursuant
to the terms of the TD Ameritrade Stockholders Agreement, TDBFG’s beneficial
ownership of TD Ameritrade is currently limited to 39.9% of the outstanding
voting securities. This limit will increase to 45% in January 2009.
“At
this time TDBFG intends to move to the 45% ownership level when that is
permitted in 2009. The purpose of the arrangement announced today is to
provide
TDBFG with price protection to accomplish this goal and is consistent with
our
practice of proactively hedging risk,” said Ed Clark, President and Chief
Executive Officer, TDBFG.
The
arrangement is between a subsidiary of The Toronto-Dominion Bank and Lillooet
Limited, a company sponsored by Royal Bank of Canada. It permits a hedge
in
respect of up to 27 million shares of TD Ameritrade common stock. The number
of
shares hedged and the hedge price will be determined based on market conditions
over a specified hedging establishment period. The
arrangement provides that Lilloett must make a payment to TD in early 2009
in
the event that the trading price of TD Ameritrade shares has
increased. If
the trading price declines, TDBFG will be required to pay Lillooet Limited
a
specified amount related to the decrease.
“We
are pleased with the action being taken by TDBFG. This is a positive sign
by our
largest shareholder that illustrates they intend to increase their ownership,
believe in our business strategy and recognize the great value of our stock
price at this time,” said Joe Moglia, Chief Executive Officer, TD
Ameritrade.
The
arrangement is scheduled to be settled in TDBFG’s second fiscal quarter of 2009,
subject to acceleration or early termination in certain circumstances.
The
arrangement does not provide TDBFG any right to acquire, or any voting
or other
ownership rights with respect to, any shares of TD Ameritrade.
TDBFG
expects to consolidate Lillooet for financial reporting purposes commencing
in
the fourth quarter 2006. As a result of consolidation, any TD Ameritrade
shares
held by Lillooet from time to time would be included in TDBFG’s reported
investment in TD Ameritrade for such period. Updates and any earnings impact
will be contained in the Bank’s regular financial reporting. This
transaction will have minimal impact on TDBFG's Tier 1 capital ratio.
About
TD Bank Financial Group
The
Toronto-Dominion Bank and its subsidiaries are collectively known as TD
Bank
Financial Group. TD Bank Financial Group serves more than 14 million customers
in four key businesses operating in a number of locations in key financial
centres around the globe: Canadian Personal and Commercial Banking including
TD
Canada Trust; Wealth Management including TD Waterhouse and an investment
in TD
Ameritrade; Wholesale Banking, including TD Securities; and U.S. Personal
and
Commercial Banking through TD Banknorth. TD Bank Financial Group also ranks
among the world's leading on-line financial services firms, with more than
4.5
million on-line customers. TD Bank Financial Group had CDN$385.8 billion
in
assets, as of July 31, 2006. The Toronto-Dominion Bank trades on the Toronto
and
New York Stock Exchanges under the symbol "TD".
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For
more information, please contact:
Neil
Parmenter
AVP
Corporate Communications
416-982-4285
Scott
Lamb
VP
Investor Relations
416-982-5075