On the 1st of November 2018, Commonwealth Bank of Australia (“CBA”) launched an offer for CommBank PERLS XI Capital Notes (expected ASX Code: CBAPH). The offer size is guided to be $750 million, with the bank retaining the ability to raise more or less.
These securities are structured as perpetual, subordinated, unsecured, convertible notes. Distributions are expected to be discretionary, non-accumulative, floating rate, fully franked, and paid on a quarterly basis in arrears until converted or redeemed. The securities will be issued on the 17th of December 2018 and the margin on this security is expected to be set between 3.70% - 3.90% p.a. above 90-Day BBSW.
This security has no fixed maturity date but is scheduled for mandatory conversion into CBA ordinary shares on the 26th of April 2026, or later when conversion conditions have been satisfied. At the issuer’s discretion, and subject to approval by APRA, the notes may be redeemed/transferred on the 26th of April 2024.
Summary details of the transaction are listed in the table below:
|
Product Types |
Capital Note |
Last Price |
$100.00 |
|
Issue Size* |
[$750,000,000] |
Accrued |
$0.00 |
|
Par Value |
$100 |
Capital Price |
$100.00 |
|
Fixed / Floating |
Floating |
Running Yield** |
[5.61% - 5.81%] |
|
Payment Frequency |
Quarterly |
Yield to Call*** |
[6.18% - 6.38%] |
|
Current Distribution** |
[5.61% - 5.81%] |
Trading Margin*** |
[3.70% - 3.90%] |
|
Issue Margin*** |
[3.70% - 3.90%] |
Optional Call Date |
26 April 2024 |
|
Franking Credits Inclusive |
Yes |
Legal Final Maturity |
|
|
ASX Listed |
Yes (Prospective ASX Code: CBAPH) |
Next Ex-Date |
[TBC] |
|
Convertible |
Yes |
Next Payment Date |
15 March 2019 |
|
GICS Sector |
Banks |
Next Cash Distribution |
[TBC] |
* Issue size is subject to change but expected to be $750 million. ** Based on prospective issue margin plus 90-Day BBSW of 1.910% *** Based on prospective issue margin of 3.70% and an interpolated swap rate to the call of 2.481%.
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