While things have not been exactly going great for Canadian banking giant Toronto Dominion Bank (TSE:TD), it recently pulled a move that did not sit well with shareholders. It landed the naming rights to an arena in Hamilton, Ontario, and will be putting those to work soon. The move left shareholders cold, and shares slipped fractionally in Wednesday morning’s trading.
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The former FirstOntario Centre, now a project under Oak Leaf Group’s management, is currently being renovated to offer the community access to an 18,000 seat arena for sports and entertainment functions. Naturally, that means a lot of cash going into the project—around $280 million at last report—so Oak Leaf went looking for sponsors and found one in TD Bank.
Now, the arena in question will be known as TD Coliseum, in a multi-year deal that will start fairly soon. The venue itself is set to open before the year is out, and will feature improvements in production facilities, artist lounges, lighting, and electrical systems to help ensure the shows presented therein go off well and to the best effect. Andrea Bocelli will be performing there December 9, followed by Brad Paisley on December 12.
Where the Cash Came From
It would be easy to wonder where TD Bank got the cash necessary to pick up those naming rights—terms of the deal were undisclosed across multiple sources—until you consider a recent move TD Bank made to automate its bond trading operations.
About a week ago, we found out that TD Bank had been building a computerized trading system for bond trades which has driven it up the US league tables for corporate bond transactions. Back in 2021, it ranked 20th. At last report, it stood in 6th place, making it a testament to the sheer potential of automated systems. TD Bank’s recent move to cut back on tellers also likely gave the bank some extra cash to throw around.
Is TD a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:TD stock based on five Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 31.55% rally in its share price over the past year, the average TSE:TD price target of C$97.40 per share implies 1.16% downside risk.
