National Bank and Canadian Western Bank Announce CWB Tier 1 Capital Reorganization

CWB Preferred Shares Series 5 & 9: Meetings on November 28, 2024

CWB Limited Recourse Capital Notes Series 1 & 2: Consent Deadline of November 28, 2024

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

MONTREAL and EDMONTON, AB, Oct. 16, 2024 /CNW/ - National Bank of Canada ("National Bank") (TSX: NA) and Canadian Western Bank ("CWB") (TSX: CWB) today announced a planned reorganization of CWB's tier 1 capital in the context of the previously announced proposed acquisition of all of the common shares of CWB by National Bank (the "Transaction").

The proposed amendments will permit the exchange of CWB's Preferred Shares into new National Bank Preferred Shares and an early redemption of CWB's LRCNs (each as defined below).

The tier 1 capital reorganization involves and requires amendments to the following CWB securities:

• $125 million First Preferred Shares Series 5 (Non-Viability Contingent Capital (NVCC)) (the "Series 5 Preferred Shares");
• $125 million First Preferred Shares Series 9 (NVCC) (the "Series 9 Preferred Shares" and together with the Series 5 Preferred Shares, the "Preferred Shares");
• $175 million 6.00% Limited Recourse Capital Notes Series 1 (NVCC) (Subordinated Indebtedness) (the "Series 1 LRCNs"); and
• $150 million 5.00% Limited Recourse Capital Notes Series 2 (NVCC) (Subordinated Indebtedness) (the "Series 2 LRCNs" and together with the Series 1 LRCNs, the "LRCNs").

The amendments are being proposed pursuant to CWB's covenant in the transaction agreement for the Transaction to take certain corporate actions at the request of National Bank prior to the completion of the Transaction. The implementation of the proposed amendments will be conditional upon the completion of the Transaction, which requires approval by the Superintendent of Financial Institutions (Canada) and the Minister of Finance (Canada). The implementation of the proposed amendments is also subject to regulatory approvals and approval of the Toronto Stock Exchange (the "TSX") to list the National Bank Preferred Shares (as defined below).

The Preferred Share Amendments

CWB has called a meeting of the (i) holders of the Series 5 Preferred Shares, and (ii) holders of the Series 9 Preferred Shares to approve certain amendments to the terms of the Preferred Shares (the "Preferred Share Amendments").

The Preferred Share Amendments will make the Preferred Shares exchangeable, following the closing of the Transaction, into new First Preferred Shares of National Bank having substantially the same rights, privileges, restrictions and conditions as the Preferred Shares (the "National Bank Preferred Shares"), including the following:

The Preferred Share Amendments will be further described in the Notice of Meetings and Management Proxy Circular of CWB (the "Circular") which will be mailed to holders of the Preferred Shares. Holders of the Preferred Shares are urged to read and carefully consider the information contained in the Circular.

The meeting of the holders of the Series 5 Preferred Shares and the meeting of the holders of the Series 9 Preferred Shares will be held on November 28, 2024 at 10:00 a.m. (Mountain Time). The record date for determining the holders of Preferred Shares entitled to vote at the respective meetings is October 24, 2024 at 5:00 p.m. (Mountain time). Holders of Preferred Shares entitled to vote at the respective meetings as of the record date shall have one vote for every Series 5 Preferred Share or Series 9 Preferred Share held by such holder, as applicable.

As will be described in the Circular, holders of the Preferred Shares are expected to benefit from receiving a security with substantially the same rights, privileges, restrictions and conditions issued by a larger organization. To facilitate the exchange process, subject to the Preferred Share Amendments coming into force, a consent fee of $0.50 per Preferred Share will be payable to the holders of Preferred Shares who vote, either in person or by proxy regardless of whether such vote is for or against the applicable Preferred Share Amendment.

The proposed amendments to the Series 5 Preferred Shares and to the Series 9 Preferred Shares require approval by the affirmative vote of at least two-thirds of the votes cast at a meeting of the holders of the Series 5 Preferred Shares and the Series 9 Preferred Shares, respectively, at which holders of not less than one-third of the Series 5 Preferred Shares and the Series 9 Preferred Shares, as applicable, then outstanding are present in person or represented by proxy (subject to lower quorum requirements at an adjourned meeting as will be described in the Circular).

The LRCN Amendments

CWB has commenced a solicitation of written consents from the (i) holders of the Series 1 LRCNs, and (ii) holders of the Series 2 LRCNs to approve certain amendments to the (i) trust indenture dated as of October 30, 2020 between CWB and Computershare Trust Company of Canada ("Computershare"), as trustee (the "Series 1 Indenture"), and (ii) trust indenture dated as of March 25, 2021 between CWB and Computershare, as trustee (the "Series 2 Indenture", and together with the Series 1 Indenture, the "Indentures"), respectively (the "LRCN Amendments").

The LRCN Amendments will make the LRCNs redeemable following the closing of the Transaction. The LRCN Amendments will be further described in the Consent Solicitation Statement (the "Solicitation Statement") which will be mailed to holders of the LRCNs. Holders of the LRCNs are urged to read and carefully consider the information contained in the Solicitation Statement.

The record date for determining holders of LRCNs entitled to consent to the LRCN Amendments is October 16, 2024 at 5:00 p.m. (Mountain time). The proposed amendments to the Series 1 Indenture and to the Series 2 Indenture require the written consent of holders of a majority in principal amount of the outstanding Series 1 LRCNs and of holders of a majority in principal amount of the outstanding Series 2 LRCNs, respectively. The consent solicitation will expire at 5:00 p.m. (Mountain time), on November 28, 2024, unless otherwise extended or terminated by CWB. Please note that, for beneficial holders of LRCNs holding through intermediaries in the CDS depositary and clearing system, CDS participants may set deadlines for the return of consent instructions that are well in advance of this time.

As will be described in the Solicitation Statement, if the LRCN Amendments are approved and come into force by the execution of a supplemental indenture to each of the Indentures, CWB will pay a consent fee to the holders of Series 1 LRCNs as of the record date of the LRCNs equal to $33.00 per $1,000 principal amount of the Series 1 LRCNs held; provided that such consent fee will decrease to: (i) $23.00 per $1,000 principal amount if the LRCN Amendments only come into force after June 30, 2025 but on or before December 31, 2025; and (ii) $10.00 per $1,000 principal amount if the LRCN Amendments only come into force on or after January 1, 2026. Holders of Series 2 LRCNs as of the record date of the LRCNs will also be entitled to the payment of a consent fee equal to $27.00 per $1,000 principal amount of the Series 2 LRCNs held; provided that such consent fee will decrease to: (i) $21.00 per $1,000 principal amount if the LRCN Amendments only come into force after June 30, 2025 but on or before December 31, 2025; and (ii) $10.00 per $1,000 principal amount if the LRCN Amendments only come into force on or after January 1, 2026.

For Assistance or Further Information

The Preferred Shares: National Bank Financial Inc. is acting as Proxy Solicitation Agent, and Kingsdale Advisors is acting as the Proxy Solicitation and Information Agent for the Preferred Shares pursuant to meetings to be held on November 28, 2024. If you have any questions or need assistance, please contact Kingsdale Advisors by telephone at 1-866-851-3215 (toll-free in North America) or 1-437-561-5012 (text and call enabled outside North America), or by email at contactus@kingsdaleadvisors.com, or National Bank Financial Inc. at 416-869-6660, or by email at CWB_capital_reorganization@nbc.ca.

The LRCNs: National Bank Financial Inc. is acting as Solicitation Agent for the solicitations of consents, and Kingsdale Advisors is acting as Solicitation and Information Agent. Questions concerning the consent solicitation, requests for assistance in completing the consent or other requests for assistance should be directed to Kingsdale Advisors at 1-866-851-3215 (toll-free in North America) or 1-437-561-5012 (text and call enabled outside North America), or by email at contactus@kingsdaleadvisors.com, or to National Bank Financial Inc. at 416-869-8639, or by email at CWB_capital_reorganization@nbc.ca.

NO OFFER OR SOLICITATION

This news release is for informational purposes only and shall not constitute an offer to purchase or a solicitation of an offer to sell any securities, or a solicitation of a proxy or consent of any securityholder of any person in any jurisdiction. Any offers or solicitations will be made in accordance with the requirements under applicable law. Securityholders are advised to review any documents that may be filed with securities regulatory authorities or made available to such securityholders, including, without limitation, the Circular and Solicitation Statement, as applicable, and any subsequent announcements because they will contain important information regarding the proposed Preferred Share Amendments and LRCN Amendments and the terms and conditions thereof. The circulation of this press release may be subject to a specific regulation or restrictions in some countries. Consequently, persons in possession of this press release must familiarize themselves and comply with any restrictions that may apply to them.

NOTICE TO U.S. HOLDERS OF CWB PREFERRED SHARES

National Bank is planning to furnish a Form CB, which will include CWB's Circular and related documents, with the United States Securities and Exchange Commission ("SEC") in respect of National Bank Preferred Shares to be offered or exchanged to U.S. holders of the Preferred Shares in connection with the Preferred Share Amendments. Investors and holders of the Preferred Shares are urged to read such Form CB, Circular and all other relevant documents furnished or to be furnished with the SEC in connection with the offer or exchange as they become available, as well as any amendments or supplements to those documents, because they contain or will contain important information. You will be able to obtain a free copy of such Form CB, Circular, as well as other related documents, at the SEC's website (www.sec.gov). The National Bank Preferred Shares that will be issued to U.S. holders of the Preferred Shares in connection with the Preferred Share Amendments have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or the securities laws of any state of the United States and will be issued in reliance on the exemption from the registration requirements of the Securities Act set forth in Rule 802 thereunder.

ABOUT NATIONAL BANK

With $454 billion in assets as at July 31, 2024, National Bank is one of Canada's six systemically important banks. National Bank has approximately 30,000 employees in knowledge-intensive positions and operates through three business segments in Canada: Personal and Commercial Banking, Wealth Management and Financial Markets. A fourth segment, U.S. Specialty Finance and International, complements the growth of its domestic operations. Its securities are listed on the Toronto Stock Exchange (TSX: NA). Follow National Bank's activities at nbc.ca or via social media.

ABOUT CWB

CWB is the only full-service bank in Canada with a strategic focus to meet the unique financial needs of businesses and their owners. CWB provides its nationwide clients with full-service business and personal banking, specialized financing, comprehensive wealth management offerings, and trust services. Clients choose CWB for a differentiated level of service through specialized expertise, customized solutions, and faster response times relative to the competition. CWB people take the time to understand its clients and their business, and work as a united team to provide holistic solutions and advice.

As a public company on the TSX, CWB trades under the symbols "CWB" (common shares), "CWB.PR.B" (Series 5 preferred shares) and "CWB.PR.D" (Series 9 preferred shares). CWB is firmly committed to the responsible creation of value for all its stakeholders and its approach to sustainability will support its continued success. Learn more at www.cwb.com.

FORWARD-LOOKING INFORMATION

From time to time, National Bank and CWB make written and verbal forward-looking statements. Statements of this type are included in this press release and may be included in filings with Canadian and U.S. securities regulators or in other communications such as media releases and corporate presentations. Forward-looking statements in this press release may include, but are not limited to, statements regarding the meeting of the holders of the Series 5 Preferred Shares and of the Series 9 Preferred Shares to approve the Preferred Share Amendments (including the timing thereof), the consent solicitation process, the mailing of the Circular, the Solicitation Statement and other meeting and consent solicitation materials, the consent solicitation deadline, the payment of consent fees, the anticipated approval and effects of the proposed amendments, the regulatory approval (including the TSX approval) of the proposed amendments and the completion of the Transaction. Forward-looking statements are typically identified by the words "believe", "expect", "anticipate", "intend", "estimate", "may increase", "may impact", "goal", "focus", "potential", "proposed" and other similar expressions, or future or conditional verbs such as "will", "should", "would" and "could".

By their very nature, forward-looking statements involve numerous assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that National Bank's and/or CWB's predictions, forecasts, projections, expectations, and conclusions will not prove to be accurate, that National Bank's and/or CWB's assumptions may not be correct, and that National Bank's and/or CWB's strategic goals will not be achieved. Assumptions underlying forward-looking statements included in this press release also include the terms and conditions of the consent solicitation and proposed amendments, the expected approval of the proposed amendments, the timing of completion of the Transaction and the conditions precedent to the closing of the Transaction (including the required regulatory approvals).

Forward-looking statements in this press release are based on a number of assumptions and are subject to risk factors, many of which are beyond National Bank's and CWB's control and the impacts of which are difficult to predict. These risk factors include, but are not limited to, the terms and conditions of the consent solicitation and proposed amendments (including the regulatory approvals required to implement such amendments); the impact of such amendments assuming those are implemented; the intention to implement the proposed amendments following closing of the Transaction; the expected timing of completion of the Transaction and the conditions precedent to the closing of the Transaction (including the required regulatory approvals); that the Transaction will be completed on the terms currently contemplated; risk and uncertainties relating to the expected regulatory processes and outcomes in connection with the Transaction; National Bank's inability to successfully integrate CWB upon completion of the Transaction; the possible delay or failure to realized anticipated benefits from the Transaction; the potential failure to obtain the required approvals to the Transaction in a timely manner or at all; National Bank's reliance upon publicly available information of CWB; potential undisclosed costs or liability associated with the Transaction; National Bank or CWB being adversely impacted during the pendency of the Transaction; and assumptions about future events, including economic conditions and proposed courses of action, based on National Bank and CWB management's assessment of the relevant information available as of the date hereof; and National Bank's and CWB's ability to anticipate and manage the risks associated with these factors. It is important to note that the preceding list is not exhaustive of possible factors.

Additional information about certain factors and additional risk factors can be found in the "Risk Management" section of CWB's 2023 Annual MD&A, in the "Risk Management" section of National Bank's 2023 Annual Report, in the "Risk Management" section of National Bank's Report to Shareholders for the third quarter of 2024, in the Circular as well as in other reports and documents filed by National Bank and CWB with securities regulators or securities commissions from time to time and other documents that National Bank and CWB makes public. These and other factors should be considered carefully, and readers are cautioned not to place undue reliance on these forward-looking statements as a number of important factors could cause CWB's and/or National Bank's actual results to differ materially from the expectations expressed in such forward-looking statements. Any forward-looking statements contained in this press release represent CWB's and National Bank's views as of the date hereof. Unless required by law, neither CWB or National Bank undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time by or on behalf of CWB or National Bank. The forward-looking statements contained in this press release are presented for the purpose of assisting readers in understanding the financial position and results of operations of CWB and National Bank as at and for the periods ended on the dates presented, as well as CWB's and National Bank's strategic priorities and objectives, and may not be appropriate for other purposes.

SOURCE Canadian Western Bank