The Convertible Notes, issued by ANZ’s New York Branch, are non-cumulative, perpetual, subordinated, and pay a monthly coupon equal to the 30 day bank bill rate plus 200 basis points. The Convertible Notes are unlisted.
The Convertible Notes convert into a variable number of ANZ ordinary shares on 28 September 2009 or each quarterly interest payment date thereafter, at the holders’ option, or earlier following the occurrence of certain events. The variable number of ordinary shares to be issued on any conversion is determined by reference to the simple average of the daily volume weighted average sales prices of ANZ’s ordinary shares sold on the ASX during the 15 trading days prior to conversion, after applying a 1% discount.
Subject to APRA approval, ANZ may redeem the Convertible Notes at face value on any interest payment date on or after 29 December 2008 or following the occurrence of certain events.
The Convertible Notes constitute Innovative Tier 1 Capital for ANZ on a Level 1 and a Level 2 basis and are in addition to the current offer of ANZ Convertible Preference Shares which is expected to settle on 30 September 2008.
The proceeds of the issue of the Convertible Notes will be used outside of Australia by ANZ for its general corporate purposes.