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ANZ launches Convertible Preference Shares Offer

Australia and New Zealand Banking Group Limited (ANZ) today lodged a Prospectus with the Australian Securities and Investments Commission (ASIC) for an offer of convertible preference shares (CPS) to raise A$500 million with the ability to raise more or less (the Offer). 

ANZ Group Treasurer Rick Moscati said: “The Offer forms part of ANZ’s continuing capital management strategy and provides cost-effective hybrid capital for the bank whilst giving investors an attractive offering from a AA rated financial institution.”


Key Features of ANZ Convertible Preference Shares 

• CPS are preference shares issued by ANZ, which will Convert into Ordinary Shares on 16 June 2014 (subject to certain conditions being satisfied), unless ANZ elects for a third party to purchase the CPS.

• Dividends on CPS are preferred, non-cumulative, based on a floating rate and expected to be fully or substantially franked. Dividends are scheduled to be paid quarterly in arrears, subject to the Payment Tests.

• The Dividend Rate will be calculated each quarter as the sum of the Bank Bill Rate plus the Margin, together multiplied by (1 – corporate tax rate (which is currently 30%)). The Margin will be determined following the Bookbuild (3 September 2008) and is expected to be in the range of 2.50% to 2.90%.

• On 16 June 2014, CPS Holders will receive a variable number of Ordinary Shares on Conversion unless the Mandatory Conversion Conditions are not satisfied or ANZ elects for a third party to purchase the CPS.

• The Mandatory Conversion Conditions are intended to provide protection to CPS Holders from receiving less than A$102.56 worth of Ordinary Shares per CPS on Conversion based on the volume weighted average price (VWAP) of Ordinary Shares during the 20 Business Days before the Mandatory Conversion Date. ANZ may, with APRA’s prior written approval, elect to Redeem CPS if any of the Mandatory Conversion Conditions are not satisfied.

• CPS may be Exchanged by ANZ at certain times before 16 June 2014 if an Acquisition Event, Tax Event or Regulatory Event occurs. CPS must, subject to APRA’s prior written approval, be Exchanged if a Change of Control Event occurs.

• CPS have been assigned a credit rating of A+ by Standard & Poors and a provisional credit rating of Aa3 by Moody’s.

• ANZ will apply for CPS to be quoted on the Australian Securities Exchange (ASX) and are expected to trade under ASX code ‘ANZPB’. 


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