On 8th February 2017, National Australia Bank (NAB) announced a new transaction, NAB Subordinated Notes 2 (ASX Code: NABPE). The purpose of this transaction is to provide Regulatory Capital for the group but more specifically, it will be treated as Tier 2 capital. The indicative size of the offer is [$750 million] but NAB retain the ability to change the issue size.
The notes will be offered to eligible holders of NAB Subordinated Notes (ASX: NABHB) to reinvest their capital, security holders, brokers and institutional investors.
These securities are structured as direct, subordinated and unsecured notes. Distributions are non-discretionary, floating rate, unfranked and cumulative but subject to the solvency test. Distributions will be paid on a quarterly basis based on a calculation equal to 90-Day BBSW plus a margin. The margin will be set at book build with the current guidance being [2.20-2.30%].
Summary details of the transaction are listed in the table below:
|
Product Types |
Structured Note |
Last Price |
$100.00 |
|
Issue Size* |
[$750,000,000] |
Accrued |
$0 |
|
Par Value |
$100 |
Capital Price |
$100.00 |
|
Fixed / Floating |
Floating |
Running Yield** |
[3.97-4.07%] |
|
Payment Frequency |
Quarterly |
Yield to Maturity*** |
[4.92-5.02%] |
|
Current Distribution** |
[3.97-4.07%] |
Trading Margin* |
- |
|
Issue Margin**** |
[2.20-2.30%] |
Optional Call Date |
[20 September |
|
Franking Credits Inclusive |
No |
Legal Final Maturity |
[20 September |
|
ASX Listed |
Yes (Prospective ASX Code: NABPE) |
Next Ex-Date |
- |
|
Convertible |
No |
Next Payment Date |
[20 June 2017] |
|
GICS Sector |
Banks |
Next Cash Distribution**** |
$1.00 |
*Issue size is expected to be [$750 million] **Based on prospective issue margin below plus 90-Day BBSW of ~[1.770%]. ***Based on prospective issue margin of [2.20 - 2.30%] & interpolated swap rate to the call of [2.724%]. ****Actual cash amount based on $100 face value.
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