By Rebecca Melvin
New York, Sept. 4 - Australia and New Zealand Banking Group Ltd. priced an upsized A$1 billion of six-year floating-rate convertible preferred shares with a margin rate of 2.50% per year, according to a news release.
The deal was initially expected to be A$500 million in size.
The convertible preferred share non-cumulative dividend margin came at the rich end of talk, which was between 2.50% to 2.90%.
The rate is calculated as the sum of the Bank Bill Rate plus the margin, multiplied by the corporate tax rate, which is 30%.
Joint lead managers of the deal, which saw strong demand, were ANZ Securities, Citigroup, Commonwealth Securities, Deutsche Bank, E*Trade Australia, Goldman Sachs JB Were, JPMorgan, Macquarie Capital and UBS. Co-managers are Credit Suisse and ABN Amro Morgans.
Trading of the convertible preferred shares on the Australian Securities Exchange, under the symbol "ANZPB," is expected to begin Oct. 1, following closing and issue dates at the end of September.
The convertible preferred shares, with a par of A$100 each, have mandatory conversion on June 16, 2014, at which time holders will receive a variable number of ordinary shares, but at least A$102.56 worth of ordinary shares per convertible preferred share based on the volume weighted average price of ordinary shares during the 20 business days before mandatory conversion.
There is a put in the event of an acquisition, a tax event or a regulatory event.
Proceeds will be used as part of ANZ's capital management strategy, providing cost-effective hybrid capital for the bank.
The convertible preferred shares have been assigned a credit rating of A+ by Standard & Poor's and a provisional credit rating of Aa3 by Moody's Investors Service.
Melbourne-based ANZ is a financial services company and Australia's fourth-largest bank.
| Issuer: | Australia and New Zealand Banking Group Ltd.
|
| Issue: | Convertible preferred shares
|
| Amount: | A$1 billion, upsized from A$500 million
|
| Maturity: | June 16, 2014
|
| Bookrunners: | ANZ Securities, Citigroup, Commonwealth Securities, Deutsche Bank, E*Trade Australia, Goldman Sachs JB Were, JPMorgan, Macquarie Capital and UBS
|
| Co-managers: | Credit Suisse and ABN Amro Morgans
|
| Dividend: | Floating, Bank Bill rate plus 2.5% margin
|
| Price: | Par of A$100
|
| Pricing date: | Sept. 3
|
| Settlement date: | Sept. 30
|
| Ratings: | Moody's: Aa3
|
| Standard & Poor's: A+
|
| Margin talk: | 2.5%-2.9%
|
| Listing: | Australia: ANZPB
|
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