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ANZ launches Convertible Preference Share Offer (PDF 1.08MB)

ANZ has lodged a Prospectus with the Australian Securities and Investments Commission for an offer of convertible preference shares (CPS2) to raise $750 million with the ability to increase or reduce the size of the offer. 

The Offer forms part of ANZ’s diversified capital management strategy and follows reductions in Tier 1 capital following hybrid capital redemptions and notices of redemption totaling approximately $1 billion over the past six months.


Prior to this Offer, hybrid capital, both innovative and non-innovative, constituted approximately 14% of ANZ’s Net Tier 1 capital compared to the 25% maximum imposed by the Australian Prudential Regulatory Authority (APRA).


Key Features of CPS2


  • CPS2 will qualify as non-innovative Tier 1 capital under current APRA rules.

  • CPS2 are preference shares issued by ANZ, which will Convert into Ordinary Shares on 15 December 2016 (subject to certain conditions being satisfied), unless ANZ elects for a third party to purchase the CPS2 or they are exchanged earlier.

  • Dividends on CPS2 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 (17 November 2009) and is expected to be in the range of 3.10% to 3.30%.

  • On 15 December 2016, CPS2 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 CPS2.

  • CPS2 have been assigned an indicative credit rating of A+ by Standard & Poor’s.

  • ANZ will apply for CPS2 to be quoted on the Australian Securities Exchange (ASX) and are expected to trade under ASX code ‘ANZPA’.


The Offer is expected to open on 18 November 2009 and comprises:


  • an ANZ Securityholder Offer, open to Australian resident holders of Ordinary Shares or convertible preference shares issued by ANZ in September 2008 (2008 CPS) on the Register at 7.00pm (Melbourne time) on Friday 30 October 2009;

  • a General Offer, open to Australian residents who are neither an ANZ Securityholder Applicant, Broker Firm Applicant nor Institutional Investor;

  • a Broker Firm Offer, open to clients of Syndicate Brokers invited to participate through the Broker Firm Offer; and

  • an Institutional Offer, open to investors that have been invited by the Joint Lead Managers to bid for CPS2 through the Institutional Offer.


The closing date for the ANZ Securityholder Offer and General Offer is currently scheduled to be at 5:00pm (Melbourne time) on 10 December 2009.


The Broker Firm Offer is currently scheduled to close at 10:00am (Melbourne time) on 16 December 2009. 


The ANZ CPS2 Prospectus has been lodged with ASIC and the ASX and is available for download within Australia at www.CPS2Offer.anz.com or by calling the ANZ Information Line on 1800 113 399 (Australia) or +61 3 9415 4010 (international).


A replacement Prospectus, containing the Margin and with Application forms will be made available when the Offer opens, expected to be on 18 November 2009.


Investors should consider the Prospectus in deciding whether to apply for CPS2. Applications may only be made using the application form attached to or accompanying the replacement Prospectus. Shareholder approval is not required for the issue of CPS2.


ANZ Securities, Commonwealth Securities, Deutsche Bank, Goldman Sachs JB Were, Macquarie, Morgan Stanley, Westpac and UBS have been appointed as Joint Lead Managers on the transaction.


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