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Commonwealth Bank raising more than $1bn
Allens is advising Commonwealth Bank of Australia on its offer of capital notes to raise funds to align with regulations, maintain diversity and fund the business.
Grace Ormsby
Firm: Allens (Commonwealth Bank of Australia)
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Deal: Allens is advising Commonwealth Bank of Australia on its offer of capital notes to raise capital.
Value: $1.25 billion
Area: Corporate
Key players: Allens’ team was led by co-heads of equity capital markets, Julian Donnan and Robert Pick. They were assisted by associate Niki Haralambidis and lawyers Elise Blume and Bridgette Gorman.
Deal significance: The offer of CommBank PERLS XI capital notes was originally announced on 1 November 2018, to raise approximately $750 million.
This was increased to $1.25 billion “following strong demand from syndicate brokers and institutional investors in the bookbuild,” an Allens statement said.
The offer includes a reinvestment offer for existing PERLS VI holders as well as a CBA security holder offer.
The CommBank PERLS XI capital notes are subordinated and unsecured notes issued by the Commonwealth Bank.
Proceeds from the new issue will raise Tier 1 Capital to satisfy the bank’s regulatory capital requirements and maintain its source diversity and funding types, while net proceeds from the offer will fund the bank’s business.
Co-lead partner Mr Pick said “we were delighted to work with the CBA Treasury and Legal teams in bringing this issue to the market to further strengthen CBA’s Tier 1 Capital position.”
While Mr Donnan added that “whilst there has been some recent turbulence in equity markets, it is pleasing to see evidence of ongoing strong demand for hybrid capital from Australia’s banks.”
The offer is expected to close by 7 December 2018.
