ANZ Bank has this morning announced the launch of ANZ Capital Notes 8 through an offer to raise $1billion with the offer expected to open on 23 February 2023.
At the same time, the bank announced the redemption of ANZ Capital Notes 3 (ASX:AN3PG) on 24 March 2023. A reinvestment offer has been made for eligible CN3 holders to reinvest all or some of their redemption proceeds in ANZ Capital Notes 8.
The new funds will be used by the bank for general corporate purposes and to fund the ANZ Capital Notes 3 redemption. ANZ Capital Notes 8 will constitute Additional Tier 1 Capital under APRA standards.
The margin will be determined under the bookbuild expected on 22 February 2023 and is expected to be in the range of 2.75% to 3.00% above the three-month bank rate (BBSW).
At the current BBSW setting, the hybrid notes will have an initial yield of between 6.25% and 6.5%.
Also read: Capital Notes – Advantages and Disadvantages
Last week, the ANZ raised higher-ranking tier-two debt at a credit margin of 2.8%. That issue raised A$1billion. The margin over the semi annual swap was equivalent to a 6.736% issue yield.
ANZ Capital Notes 8 are fully paid, perpetual, unsecured, subordinated notes issued by ANZ that in certain circumstances convert into ANZ Group Holdings ordinary shares.
ANZ does not have a specific offer for ANZ securityholders. Eligible CN3 holders cannot apply directly to ANZ to participate in the offer. ANZ Capital Notes 8 will be only available to investors who satisfy certain eligibility criteria, with all applications being submitted through a syndicate broker in accordance with the DDO regime.
ANZ Capital Notes 8 are expected to trade on the ASX on 27 March 2023.
ANZ shares at 1pm Wednesday were down 3.76%.
