On 25 February 2019, Macquarie Group Limited (MQG) launched an offer for Macquarie Capital Notes 4 (MCN4, ASX Code: MQGPD) to raise $500 million, with 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-cumulative, 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 are expected to be issued on 27 March 2019 and the margin range is guided at 4.15 – 4.35% p.a. above 90-Day BBSW.
This security has no fixed maturity date but is scheduled for mandatory exchange into MQG ordinary shares on 10 September 2029, 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 10 September 2026, 10 March 2027 or 10 September 2027. 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 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 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.
*Size is subject to final demand.
**Based on a prospective trading margin of 4.15% - 4.35% plus 90-Day BBSW of 1.895%.
***Based on a prospective trading margin of 4.15 - 4.35% and an interpolated swap rate to call of 2.180% priced to the optional call date (10 September 2026).
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