New Issue: ANZ Capital Notes 5 (and Buyback Facility for ANZPC)

On the 16th August 2017, the Australia and New Zealand Banking Group Limited (ANZ) announced a new issue, namely ANZ Capital Notes 5 (CN5, prospective ASX Code: ANZPH).  The transaction provides regulatory capital for the group and constitutes Additional Tier 1 capital.  The indicative size of the offer is up to [$1 billion] and ANZ reserves the right to raise less than this under the offer.  The notes will be offered to eligible holders of ANZ’s CPS3 (ASX: ANZPC), other ANZ security holders and new holders through the broker firm new money offer (should it proceed).

The securities are structured as perpetual, unsecured, convertible, transferable, redeemable and subordinated notes. Distributions are discretionary, fully franked, floating rate, non-cumulative and subject to payment conditions. Interest payments will be quarterly, and calculated as the 90-Day BBSW (Bank Bill Swap Rate) rate plus an interest margin, multiplied by (1 – Current Company Tax Rate).  Guidance on this margin is currently [3.80 - 4.00%].

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

Product Types

Last Price

$100.00

Issue Size*

[$1,000,000,000]

Accrued

$0

Par Value

$100

Capital Price

$100.00

Fixed / Floating

Floating

Running Yield**

[5.490 - 5.690%]

Payment Frequency

Quarterly

Yield to Maturity***

[6.419 - 6.619%]

Current Distribution**

[5.490 - 5.690%]

Trading Margin***

[3.800 - 4.000%]

Issue Margin***

[3.800 - 4.000%]

Optional Call Date

20 March 2025

Franking Credits Inclusive

Yes

Legal Final Maturity

Perpetual

ASX Listed

Yes (Prospective ASX Code: ANZPH)

Next Ex-Date

1 December 2017

Convertible

Yes

Next Payment Date

20 December 2017

GICS Sector

Banks

Next Cash Distribution****

[$0.87 - 0.90]

*Issue size is subject to change but expected to be up to $1 billion. **Based on prospective issue margin below plus 90-Day BBSW of ~1.690%. ***Based on prospective issue margin in the range of [3.800 - 4.000%] and an interpolated swap rate to the call of 2.668%. ****Actual cash amount based on $100 face value.

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