National Bank has closed on a $1-billion capital raise tied to its acquisition of Canadian Western Bank.

Montreal-based National announced the plan for a public offering and concurrent private placement while signing an agreement to buy Edmonton-based CWB for about $5 billion in an all-stock deal.

Pursuant to the public offering, National issued and sold approximately 4.5 million subscription receipts at a price of $112.30 for total gross proceeds of about $500 million to a syndicate of underwriters led National Bank Financial.

The receipts now trade on the Toronto Stock Exchange.

National Bank has granted the underwriters an over-allotment of 667,950 subscription receipts at the issue [rice exercisable up to 30 days after the date hereof.

Pursuant to the concurrent private placement, National issued about 4.54 million subscription receipts for the same price to CDPQ Marchés boursiers, an affiliate of the Caisse de dépôt et placement du Québec (CDPQ) for gross proceeds of approximately $500 million. 

CDPQ has the right to purchase up to an additional 667,950 subscription receipts to maintain its pro-rata ownership under the same terms as the underwriters’ over-allotment.

National Bank plans to use the proceeds from the public offering and private placement in relation to the CWB acquisition. The proceeds of the public offering and private placement will be placed in escrow until the acquisition is completed

The CWB purchase has widespread commercial real estate implications in terms of National Bank expanding its geographical footprint and investors gaining greater access to capital, among other factors. The deal is expected to close by year-end 2025.

Photo: JHVEPhoto / Shutterstock.com