New Issue: AMP Capital Notes 2

On 26 November 2019 AMP Limited (AMP) launched AMP Capital Notes 2 (ASX Code: AMPPB), seeking to raise $200 million, with the ability to raise more or less. Proceeds will be used to meet general funding requirements, including to fund Additional Tier 1 Capital of one or more regulated entities within the AMP Group. AMP is the non-operating holding company (NOHC) of all companies within the AMP Group but is a subordinated creditor to its operating subsidiaries, hence AMP is arguably a higher risk issuer than its subsidiaries.

The Capital Notes are structured as perpetual, unsecured, convertible, transferable, redeemable and subordinated notes. Distributions will be discretionary, franked (generally expected to be 100%), floating rate, non-cumulative and subject to payment conditions. The interest margin is guided at 4.50 – 4.70% p.a. above 90-Day BBSW and paid on a quarterly basis in arrears. This security has no fixed maturity date but is scheduled for mandatory conversion into AMP ordinary shares on 16 December 2027, subject to conversion conditions being satisfied. AMP also has the right (but not the obligation) to convert, redeem or resell (subject to APRA approval) the Notes on the optional exchange date (16 December 2025).

As this security meets the new capital instrument eligibility criteria under Basel III it also contains loss absorbing terms and conditions known in the documentation as a Non-Viability Event. Upon the occurrence of this event, this security may be converted into ordinary shares without the protection of conversion conditions.

For the purposes of exchange calculation, the maximum conversion number is set based on Issue Date VWAP (TBC). If conversion cannot occur for any reason the notes will be written off and all holders rights terminated.

Summary details of the transaction are listed in the table below:

Product Type

Capital Note

Last Price


Issue Size*




Par Value


Capital Price


Fixed / Floating


Running Yield**

5.39% - 5.59%

Payment Frequency


Yield to Maturity**

5.51% - 5.71%

Current Distribution**

5.39% - 5.59%

Trading Margin**

4.50% - 4.70%

Issue Margin / Coupon**

4.50% - 4.70%

Optional Call Date

16 December 2025

Franking Credits Inclusive


Legal Final Maturity


ASX Listed

Yes (ASX Code: AMPPB)

Next Ex-Date




Next Payment Date

16 March 2020

GICS Sector


Next Cash Distribution



* Subject to change, offer size is $200 million, with the ability to raise more or less.

** Based on issue margin range of 4.50 to 4.70% plus either a 90-Day BBSW rate of 0.8942%.

*** Based on issue margin range, an interpolated swap rate to call of 1.0074% and an expected call date of 16 December 2025.

All pricing as of close 22 November 2019.

Click here to access our Full Research Report.