On 18 December 2023 Westpac Banking Corporation (Westpac) completed the offer of Westpac Capital Notes 10 (Notes) (Offer). 17.5 million Notes were issued at $100 each, raising $1.75 billion.
About Westpac Capital Notes 10
The Notes are fully paid, convertible, transferrable, redeemable, subordinated, perpetual, unsecured notes issued by Westpac, and are expected to provide investors with fully franked, floating rate, non-cumulative distributions paid quarterly.
The Notes qualify as Additional Tier 1 Capital under APRA’s capital adequacy framework.
The Offer comprised:
- a Reinvestment Offer: to clients of the Syndicate Brokers, and Institutional Investors, who are Eligible WCN 6 Holders wishing to reinvest all or some of their WCN 6 in Notes; and
- a New Money Offer: to eligible clients of the Syndicate Brokers, and Institutional Investors, wishing to make a new investment in Notes.
For more information
Details of the Notes and the Offer are set out in the Prospectus.
Target Market Determination
A Target Market Determination (TMD) was prepared for the Notes, which describes the class of retail investors to whom the Notes were targeted (described as the Target Market), and conditions around how the Notes were distributed to help ensure that retail investors were, or were reasonably likely to be, within the Target Market.
Distributions on Westpac Capital Notes 10
The Notes are expected pay fully franked, non-cumulative floating rate Distributions quarterly in arrear (subject to the Distribution Payment Conditions, which include that payment of Distributions are within the absolute discretion of Westpac).
Distributions are expected to be paid on 22 March, 22 June, 22 September and 22 December of each year (commencing on 22 March 2024), until the Notes are Converted or Redeemed.
The Distribution Rate is a floating rate and will generally be set on the first Business Day of each Distribution Period using the following formula:
Distribution Rate = (3 month BBSW Rate + Margin) x (1 – Tax Rate)
The Distribution Rate will vary each quarter based on changes in the 3 month BBSW Rate.
The Margin is 3.10% per annum and will not change.
Upcoming payment and record dates
|Distribution payment date
|Relevant record date
|22 March 2024
|14 March 2024
|13 March 2024
Distribution payment history
|Distribution rate per
|Cash amount of
Westpac Capital Notes 10
|Number of days in the
|22 March 2024
1. Expected amount / rate
Key dates for Westpac Capital Notes 10
|Record Date for first Distribution
|14 March 2024
|First Distribution Payment Date2,3
|22 March 2024
|Option for Westpac to Convert4, Redeem5 or Transfer the Notes
|22 September 2031
22 December 2031
22 March 2032
22 June 2032
|Scheduled Conversion Date6
|22 June 2034
2. Distributions are payable quarterly, subject to satisfaction of the Distribution Payment Conditions – see Section 2.1.9 of the Prospectus.
3. You should note that the first Distribution Period is a longer period of 95 days and other Distribution Periods will otherwise generally be 90 to 92 days.
4. Subject to satisfaction of the Optional Conversion Restriction – see Section 2.4.2 of the Prospectus.
5. The Redemption of the Notes is subject to APRA’s prior written approval. There can be no certainty that APRA will provide its prior written approval for any such Redemption – see Section 6.1.2 of the Prospectus. Any Redemption of the Notes does not imply or indicate that Westpac will in the future exercise any right it may have to redeem any other outstanding regulatory capital instruments issued by Westpac. Any such future redemption would also be subject to APRA’s prior written approval (which may or may not be given).
6. Conversion of the Notes to Ordinary Shares on this date is subject to satisfaction of the Scheduled Conversion Conditions – see Section 2.2.3 of the Prospectus.
Westpac lodged the Westpac Capital Notes 10 Offer Announcement on the ASX. The announcement summarises the Offer, including the eligibility requirements, how to apply and the important dates, as well as the key features of the Notes.
Westpac sent a letter and transfer notice to WCN 6 holders outlining the Reinvestment Offer, including how to participate, and the transfer of Participating WCN 6 to a Nominated Party to facilitate the reinvestment. The letter and transfer notice were also lodged on the ASX.
Westpac announced the Margin and an increase in the Offer size in the Bookbuild completion Announcement.
Westpac announced the number of the Notes issued, basis of allocation and first Distribution in the Issue completion Announcement.
Notes Deed Poll
A Notes Deed Poll has been made by Westpac in favour of Holders. The Notes Deed Poll contains the agreement of Westpac to observe its obligations as set out in the Notes Terms, an obligation to Westpac to appoint the Registrar and procure the Registrar to establish and maintain the Notes Register, and provisions for meetings of Holders.
Refer to Section 2.8.6 of the Prospectus for more information regarding the Notes Deed Poll.
ATO Class Ruling
Guidance for retail investors
Further guidance on investing in bank hybrid securities can be found on ASIC’s MoneySmart website. The guidance includes a series of questions you should ask before you invest in hybrid securities to check your understanding of how hybrids work, their features and risks.
Westpac’s Guide to Bank Hybrids
Westpac’s Guide to Bank Hybrids is a web-based guide that may help investors understand some of the typical features and risks associated with an investment in bank hybrid securities.
The Guide to Bank Hybrids may be helpful when you are considering an investment in the Notes.
The Prospectus does not provide investment advice
This website and information in the Prospectus is not investment advice and has been prepared without taking into account your investment objectives, financial situation and particular needs (including financial and taxation considerations) as an investor. In making any investment decisions with respect to the Notes, you should read the Prospectus in its entirety (including the investment risks in Sections 1.5 and 6).
ASIC has published guidance on how to choose a financial adviser on its MoneySmart website at https://moneysmart.gov.au/financial-advice/choosing-a-financial-adviser Please be aware that consultation with a financial adviser will likely incur fees and costs and may take time to complete.
- Speak to your Syndicate Broker.
- Read the Prospectus.
- Call the Westpac Capital Notes 10 Information Line (Monday to Friday, 8.30am to 7.30pm, Sydney time) on 1800 176 125 (free call within Australia) and +61 1800 176 125 (from outside Australia).
Unless otherwise defined, capitalised words used on this website have the same meaning as those in the Prospectus.
Terms and Conditions
CAUTION - Westpac Capital Notes 10 are not deposit liabilities of Westpac, are riskier than bank deposits and may not be suitable for some investors. Their complexity may make them difficult to understand and the risks associated with the Notes could result in the loss of all of your investment. If you do not fully understand how they work or the risks associated with them, you should obtain professional advice.
The Notes are not deposit liabilities or protected accounts of Westpac for the purposes of the Banking Act or the Financial Claims Scheme and are not subject to the depositor protection provisions of Australian banking legislation (including the Australian Government guarantee of certain bank deposits).
The Notes have not been and will not be registered under the US Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, delivered or transferred in the United States or to, or for the account or benefit of, any US Person. Neither the Prospectus other materials relating to the Offer may be distributed in the United States.
Copyright© 2023 Westpac Banking Corporation ABN 33 007 457 141.