Westpac Prepares $750m Capital Notes 9 Hybrid Deal

Westpac Prepares $750m Capital Notes 9 Hybrid Deal

Westpac Banking Corporation has engaged syndicate brokers to raise $750 million through the launch of its Capital Notes 9 hybrids issue.

Pricing of Westpac Capital Notes 9 is expected to be between 3.4 per cent to 3.6 per cent above the three-month bank bill swap rate. It also includes an optional reinvestment offer for investors in Westpac Capital Notes 2.

The offer opens on June 29 and closes on or before 5pm July 14.

Westpac has appointed syndicate brokers Westpac Institutional Bank, ANZ Securities Limited, Commonwealth Bank of Australia, Morgans Financial Limited, National Australia Bank Limited, Ord Minnett Limited, Shaw and Partners Limited and UBS AG, Australia Branch as joint lead managers.

Bell Potter Securities Limited, Crestone Wealth Management Limited, JBWere Limited, Morgan Stanley Wealth Management Australia Pty Limited and Wilsons Advisory and Stockbroking Limited as have been appointed co-managers.

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All Westpac Capital Notes 9 applications, including under the reinvestment offer, must be made through a syndicate broker.

Westpac Capital Notes 9 Features 

Issue Price $100 per Note.
Distribution Rate Floating rate to be determined quarterly as the sum of the 3 month BBSW Rate per annum plus the Margin per annum, together multiplied by (1 – Tax Rate)2.

The Margin will be determined via the Bookbuild, and is expected to be between 3.40% and 3.60% per annum.

Distributions are non-cumulative and are expected to be paid quarterly in arrear, subject to the satisfaction of the Distribution Payment Conditions, which include that payment of Distributions are within the absolute discretion of Westpac.

Term Perpetual, however the Notes may be Converted, Redeemed or Transferred.
Listing/trading Expected to trade on the ASX under the code WBCPL.
Offer size Approximately $750 million, with the ability to raise more or less.
Regulatory capital Additional Tier 1 Capital under the Australian Prudential Regulation Authority’s (APRA) capital adequacy framework.
Bookbuild commences for the Syndicate Brokers 21 June 2022. Eligible investors must receive an Allocation from a Syndicate Broker under the Bookbuild to apply3 (though no Applications will be accepted until the Offer opens).
Offer Opening Date 29 June 2022.
Offer Closing Date 5.00pm (Sydney time) on 14 July 2022, but may close earlier4.
Optional Conversion/ Redemption/ Transfer Westpac may elect to Convert into Ordinary Shares (subject to certain conditions), Redeem (if APRA gives its prior written approval), or Transfer:

–     all or some of the Notes on 22 September 2028, 22 December 2028, 22 March 2029, or 22 June 2029; or

–     all of the Notes following a Tax Event or Regulatory Event.



Scheduled to Convert into Ordinary Shares on 22 June 2031 subject to the satisfaction of the Scheduled Conversion Conditions.
Capital or Non- Viability Trigger Events Westpac must Convert all or some of the Notes into Ordinary Shares immediately upon a Capital Trigger Event or a Non-Viability Trigger Event. The number of Ordinary Shares that Notes Convert into is limited by a Maximum Conversion Number (as required by APRA) and Holders may suffer loss as a consequence.

If Conversion does not occur and Ordinary Shares are not issued for any reason by 5.00pm (Sydney time) on the fifth Business Day after the Capital Trigger Event Conversion Date or Non-Viability Trigger Event Conversion Date (as the case may be), all rights attached to the Notes will be terminated and the investment will lose all of its value.


For more information on Westpac Capital Notes 9, read the prospectus here.