By Rebecca Melvin
New York, Aug. 1 - Westpac Banking Corp. said its offering of hybrid tier 1 securities, known as Westpac stapled preferred securities, is expected to raise just over A$1 billion of new tier 1 capital, according to a news release.
The company is issuing 10.36 million stapled preferred securities at A$100 each, and the issue will be listed on the Australian Securities Exchange.
The offering was upsized from a planned A$600 million.
It is expected that normal trading on the ASX will begin on Aug. 7.
"This issue will further strengthen Westpac's tier 1 capital by approximately 50 basis points, which is particularly important in the current operating environment," Westpac chief financial officer Phil Coffey said.
Among the indicative top 20 security holders is UBS Wealth Management, with 379,860 shares, or 3.7%.
The stapled securities will be issued by Westpac, consisting of a Westpac preference share, stapled to a subordinated note issued by Westpac's New York branch.
On Sept. 26, 2013, the securities will either convert to Westpac stock, subject to conditions or be transferred to a nominated party in exchange for par in cash. At conversion, holders will receive A$101.01 shares per A$100 principal amount.
Interest will be paid quarterly at the Bank Bill Rate plus 240 basis points, less tax.
Deutsche Bank was the structuring advisor, with Westpac, Citi, Deutsche Bank, Goldman Sachs, JBWere, Macquarie and UBS as joint bookrunners.
The issue is expected to be rated A+ by Standard & Poor's and Aa3 by Moody's Investors Service.
The securities were only offered in Australia.
Based in Sydney, Australia, Westpac is a financial services company.
| Issuer: | Westpac Banking Corp.
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| Issue: | Stapled preferred securities
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| Amount: | A$1.036 billion
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| Maturity: | Sept. 26, 2013
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| Coupon: | Bank Bill Rate plus 240 bps
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| Price: | Par of A$100
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| Conversion ratio: | A$101.01 of shares per A$100 principal amount
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| Ratings: | Moody's: Aa3
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| S&P: A+
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| Bookrunners: | Westpac, Citi, Deutsche Bank (structuring advisor), Goldman Sachs, JBWere, Macquarie and UBS
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| Settlement date: | July 30
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