Macquarie Bank Limited Withdraws Capital Notes 2 Offer

On Friday 13 March 2020 Macquarie Bank Limited (MBL) announced that it was withdrawing its Offer of Macquarie Bank Capital Notes 2 (expected ASX code: MBLPB, BCN2).

The Notes were previously launched on 11 February 2020 and the Offer had performed strongly with $500 million allocated under the Bookbuild and the Margin set at 2.90%, the lower bound of the indicative range.

The action by MBL followed the withdrawl of NAB's Capital Notes 4 the previous night and for similar stated reasons - significantly changed market conditions in recent weeks.

MBL's commitment to repay $429 million of Macquarie Bank Capital Notes (MBLPA, BCN) and $400 million of Macquarie Income Securities (MBLHB, MIS) are unaffected by this decision and both will proceed as planned, on 24 March 2020 and 15 April 2020 respectively.

The announcement also provided a pro-forma (after the above redemptions) of the Macquarie Group (MQG) and MBL's capital position. As of 31 December 2019, the Group's capital surplus was $5.3 billion, $500 million lower and MBL's Tier 1 capital ratio was 12.7% on an APRA basis, 0.6% lower than previously noted.

Application Monies will be refunded without interest and investors who applied through the Broker Firm Offer should contact their brokers to obtain their refund.

The updated Prospectus, dated 19 February 2020 will now expire after its expiry date was brought forward to today (13 March 2020).

Like NAB, we do expect MBL to return to the market to relaunch a similar deal, when market conditions stabilise sufficiently.