Australia's St. George Bank to sell A$250 million convertible preference shares

New York, Nov. 7 - St. George Bank Ltd. said it plans to sell A$250 million of non-innovative tier 1 capital structured as converting preference shares.

The bank will sell 2.5 million preference shares at A$100 each. There will be a greenshoe for a further A$50 million.

UBS is structuring adviser and UBS and Goldman Sachs JBWere are joint lead managers.

St. George said the offering will return its tier 1 capital to the target 7% to 7.5% range.

The preference shares will pay a floating dividend, talked at the 90-day bank bill swap rate plus 110 to 140 basis points.

At maturity on Aug. 20, 2012, the preference shares will mandatorily convert into ordinary shares subject to two conditions being met. The conditions require that the ordinary share price at the time of conversion be at least 50% of the price at the settlement date of the offering and will ensure that investors do not receive less than A$101.01 of stock on conversion.

If the conditions are not met, the preference shares will convert on the next dividend date at which the conditions are satisfied.

The deal will be rated BBB+ by Standard & Poor's, A3 by Moody's Investors Service and A- by Fitch Ratings.

Pricing will be on Nov. 16.

St. George Bank is Kogarah, New South Wales, Australia, bank.

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