TD Announces Pricing of CAD Non-Viability Contingent Capital AT1 Limited Recourse Capital Notes

• TD Bank Group priced a C$1.25 billion public offering of 5.918% Non-Viability Contingent Capital (NVCC) Additional Tier 1 (AT1) Limited Recourse Capital Notes Series 7 on June 4, 2026.
• The notes carry a fixed rate until July 2031, followed by a 5-year reset tied to the 5-year Government of Canada Yield plus 2.85%, with a final maturity of July 2086.
• Proceeds are allocated to general corporate purposes, structurally backed by a concurrent trust holding NVCC Preferred Shares, strictly limiting holder recourse.
• This issuance follows a series of capital management actions: a C$1.5 billion green bond in March 2026, a CHF 150 million European green bond in April 2026, and a C$1 billion NVCC subordinated debenture in April 2026.
• The capital raise aligns with the Q2 2026 earnings release (May 28, 2026), which reported adjusted diluted EPS of $2.38 (+21% YoY) and adjusted net income of $4.17 billion (+15% YoY).
• Management highlighted record performance in Canadian Personal and Commercial Banking, accelerated momentum in U.S. Banking, and strong Wealth Management and Insurance results.
• A dividend increase to $1.12 per share and a C$2.6 billion share buyback were approved alongside the earnings, supported by a CET1 ratio of 14.3%.
• Historical news shows a consistent trajectory of AI integration (Layer 6 agentic AI launch), U.S. balance sheet restructuring, and ongoing BSA/AML remediation spending (~$500 million annually through 2027).

• The AT1 issuance is a standard regulatory capital optimization tool for a systemically important Canadian bank. It does not represent a fundamental shift in the business model or risk profile.
• The issuance is fully in line with previous expectations given the strong Q2 earnings, robust CET1 ratio (well above the 13% target), and the board's authorization of a C$7 billion share buyback program.
• By raising capital at a 5.918% fixed rate, TD secures long-term liquidity to fund its aggressive capital return program and U.S. restructuring initiatives without diluting common equity.
• The market already priced in the bank's strong earnings and capital position. The news is incremental, routine, and confirms management's disciplined approach to balance sheet management.
• No material surprise or negative deviation from guidance. The bank continues to meet its fiscal 2026 expense growth target (3-4%) and PCL guidance (40-50 basis points).

• TD Bank Group is one of Canada's largest financial institutions, operating a diversified North American franchise.
• Flagship segments include Canadian Personal and Commercial Banking, U.S. Banking, Wealth Management and Insurance, and Wholesale Banking.
• The bank is heavily investing in AI and digital transformation through its Layer 6 research centre, aiming to generate $1 billion in annual value from AI initiatives.
• Strategic focus areas include simplifying operations, accelerating execution, and expanding sustainable finance capabilities, with a $500 billion Sustainable & Decarbonization Finance Target.