On the 27th of September 2016, ANZ announced the completion of the ANZ Capital Notes 4 (ASX Code: ANZPG) offer, issuing $1.622 billion of Additional Tier 1 Capital, effectively pre-funding the ~$1.969 billion ANZPA. Holders of ANZPA were given the option to reinvest their holdings into this new security and on the 8th of November 2016, ANZ announced it will buy-back the remaining ANZPA on issue on the 15th of December 2016 (First Call Date). Holders on the register on the 30th of November 2016 will receive par value ($100) together with the final dividend payment of $0.8447. Remaining holders have the following options to consider as to how they wish to monetise their investment:
Sell the ANZPA’s on market.
Although this would free up the capital for reinvestment (sooner than the redemption date on 15 December 2016), we recommend against this as transaction fees would be incurred. The ANZPA’s capital price is currently trading below the face value amount of $100 if we account for the accrued interest embedded in the price. This is below the price this security should be theoretically trading as ($100.81 including accrued interest).
Continue to hold the ANZPA’s until the first call date of 15 December 2016.
Holders of the ANZPA will not receive the capital and final distribution until the 15th December 2016 but this remains the best course of action as no transaction costs would be incurred plus the full franking benefit would be received (providing the holder has held the security for the qualifying period of 45 days).
