Firms: Westpac (Allens); Herbert Smith Freehills ( Joint Lead Managers)
Deal: Westpac Banking Corporation’s offer of a new Tier 1 hybrid security known as Westpac Capital Notes, which are fully paid, non-cumulative, convertible, transferable, redeemable, subordinated, perpetual, unsecured notes issued by Westpac
Value: The offer is to raise $500 million, with the ability to raise more or less
Key players: HSF acted for the JLM, being Westpac Institutional Bank, Deutsche Bank, ANZ Securities, UBS, Macquarie Capital, Morgan Stanley and CBA. The team was led by Philippa Stone and fellow partner Patrick Lowden, as well as executive counsel Lauren Magraith and senior associate Lucy Hall
Deal significance: APRA has confirmed that Westpac Capital Notes will qualify as Additional Tier 1 Capital under its new Basel III capital adequacy framework, which commenced on 1 January 2013. The proceeds received by Westpac under the offer will be used for general business purposes.
Westpac Capital Notes are expected to be quoted on the ASX and offered with an issue price of $100 each. The offer is expected to open on 7 February 2013.
“We have seen an increasing number of Australian banks offering hybrid securities to the retail market since the release of APRA’s new Basel III prudential standards in 2012. Westpac is now the second major Australian bank to come to market and we are very pleased to have acted on the transaction after having acted on the first two Basel III capital raisings by CBA and Bendigo and Adelaide Bank last year,” said Stone.
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