On the 7th of May 2018, Macquarie Group Limited (“MQG”) launched an offer for Macquarie Group Capital Notes 3 (expected ASX Code: MQGPC). The size is guided to be $600 million, with the group retaining the ability to raise more or less. The securities are structured as perpetual, subordinated, unsecured and convertible notes. Distributions are expected to be discretionary, non-accumulative, floating rate, franked (currently 45%, the same rate as ordinary shares), and paid on a quarterly basis in arrears until exchanged or redeemed. The securities will be issued on the 7th of June 2018 and the margin is expected to be set between 4.00% - 4.20% p.a. above 90-Day BBSW.
This security has no fixed maturity date but is scheduled for mandatory exchange into MQG ordinary shares on the 15th of December 2027, or later when conversion conditions have been satisfied. At the issuer’s discretion, and subject to approval by APRA, the notes may be redeemed/resold or exchanged on the 16th of December 2024, 16th June 2025 or 15th December 2025. As the issuer MQG is an authorised non-operating holding company (“NOHC”), regulated by APRA, it is required to hold adequate regulatory capital to cover the risks for the whole Macquarie Group. The security has been assessed by APRA to be eligible capital under its NOHC Authority and qualifies as eligible regulatory capital of MQG. The issue of MCN3 will permit the redemption of Macquarie Group Capital Notes (MCN). The net proceeds will be used for general corporate purposes.
Conversion calculation ratios are set based on issue date VWAP and will be updated on issuance, with a Maximum Exchange Number calculated based on at least 56% of issue date VWAP.
Summary details of the transaction are listed in the table below:
|
Product Type |
Capital Note |
Last Price |
$100.00 |
|
Issue Size* |
$600,000,000 |
Accrued |
$0 |
|
Par Value |
$100.00 |
Capital Price |
$100.00 |
|
Fixed / Floating |
Floating |
Running Yield** |
[6.02% - 6.22%] |
|
Payment Frequency |
Quarterly |
Yield to Maturity*** |
[6.71%] - [6.91%] |
|
Current Distribution** |
[6.02% - 6.22%] |
Trading Margin*** |
[4.00%-4.20%] |
|
Issue Margin |
[4.00%-4.20%] |
First Optional Call Date |
16 December 2024 (6.5Y) |
|
Franking Credits Inclusive |
Yes |
Legal Final Maturity |
Perpetual |
|
ASX Listed |
Yes (ASX Code: MQGPC) |
Next Ex-Date |
9 September 2018 |
|
Convertible |
Yes |
Next Payment Date |
17 September 2018 |
|
GICS Sector |
Banks |
Next Cash Distribution**** |
$1.41 - $1.46 |
* Issue size may subject to change.
** Based on prospective issue margin range plus 90-Day BBSW.
*** Based on issue margin and an interpolated swap rate to call of 2.7088%.
**** Actual cash amount based on $100 face value.
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