North America Secondary Equity Issue: Toronto-Dominion Bank’s US$13.1bn selldown of Charles Schwab
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Toronto-Dominion Bank’s sale of its remaining stake in Charles Schwab via a US$13.1bn secondary offering recast the corporate financing strategies of the two companies.
In the first act of newly appointed CEO Raymond Chun, TD used the proceeds to repurchase 13.9% of its shares, marking a huge return for shareholders damaged by an anti-money laundering settlement a year earlier.
Schwab took advantage of the selldown to solidify its shareholder registry and buy back US$1.5bn of stock.
“This was a bold move and one that was well received by investors,” said Renu Gupta, TD Securities CFO and Global Head of Corporate Development. “In addition to value created, it signalled to investors that the new management team were doing things differently.”
TD Securities, the investment banking arm of Toronto-Dominion Bank, wall-crossed investors over a weekend before flipping to one day of public marketing on February 10 ahead of the placement of 165.4m Schwab shares at US$79.25, a 4.7% file-to-offer discount.
Chun had taken over at TD on February 1 in the wake of an anti-money laundering settlement in 2024 in which the bank agreed to pay just over US$3bn to regulators.
The wall-cross involved more than 30 institutions evenly split between long-only and hedge funds. Coinciding with Super Bowl Sunday, the weekend marketing allowed long-only institutions to have one-on-one meetings with management of both TD and Schwab, as well as two group conference calls for the hedge funds that were moderated and screened to prevent participants identifying each other.
“We had update calls during halftime of the Super Bowl,” recalled TD Securities global head of ECM Sante Corona. “When we publicly launched the following morning, we were able to communicate to the market that we were oversubscribed.”
The public marketing included a group call with more than 250 institutional investors, culminating in a deal that was more than four times covered.
“We were engaged throughout that weekend to make sure investors had the information they needed to participate,” said Schwab CFO Mike Verdeschi, who was joined by CEO Rick Wurster to address investor questions and help advise on allocating to target institutions. “The weekend wall-cross was a very innovative process."
Schwab bought back US$1.5bn of stock in the selldown, part of a US$6bn programme that was refreshed with a US$20bn programme in July.
At US$13.1bn, the TD-Schwab selldown was the largest equity offering globally in 2025 and the 11th-largest US deal ever. TD, which inherited the stake when it sold TD Ameritrade to Schwab in 2020 for US$26bn, booked a 23% gain and more than a two times cash return on this and earlier sales, according to Gupta.