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Westpac Capital Notes 3

Introduction

The information on this website is only available to persons who are not US Persons (as defined in Regulation S under the United States Securities Act of 1933, as amended (“US Securities Act”)), who are not acting for the account or benefit of a US Person and who are not prohibited by the laws of any jurisdiction outside Australia from accessing the Prospectus.
 

The Westpac Capital Notes 3 Offer is now closed.
 

On 8 September 2015, Westpac Banking Corporation through its London branch (ABN 33 007 457 141) ("Westpac") issued 13,244,280 Westpac Capital Notes 3 ("Notes") at an Issue Price of A$100 each, raising approximately $1.32 billion of Additional Tier 1 Capital.

Westpac Capital Notes 3 trade on ASX under the ASX code "WBCPF".

About Westpac Capital Notes 3

Key features of the Notes:

  • Westpac Capital Notes 3 are issued by Westpac, through its London branch.
  • The Notes will pay non-cumulative floating rate Distributions1 quarterly in arrear, beginning on 22 December 2015. Distributions are expected to be fully franked2.
  • The Distribution Rate is determined quarterly as the sum of the 90 day Bank Bill Rate per annum plus a fixed Margin per annum, together multiplied by (1 - Tax Rate). The Margin is 4.00% per annum.
  • The Notes are perpetual and have no fixed maturity date, but are scheduled to Convert into Ordinary Shares on 22 March 2023 (subject to the Scheduled Conversion Conditions).
  • The Notes may, at Westpac’s option, be Converted, Redeemed (subject to APRA approval) or Transferred on 22 March 2021.
  • The Notes must also be Converted into Ordinary Shares upon a Capital Trigger Event or a Non-Viability Trigger Event. The number of Ordinary Shares that Holders receive on Conversion in these circumstances is subject to the Maximum Conversion Number and Holders may suffer loss as a consequence. If Conversion of Notes does not occur for any reason and Ordinary Shares are not issued for any reason, all rights in relation to those Notes will be terminated and Holders will lose all of the value of their investment and they will not receive any compensation or unpaid Distributions.
  • The Notes will automatically Convert earlier if an Acquisition Event occurs and Westpac may Convert, Redeem (subject to APRA approval) or Transfer the Notes if a Tax Event or Regulatory Event occurs, in each case subject to certain conditions.
  • Holders have no right to request Conversion, Redemption or Transfer of the Notes. To realise their investment, Holders may sell their Notes on ASX at the prevailing market price.
  • In the event of a Winding Up of Westpac, if the Notes are still on issue and have not been Redeemed or Converted, they will rank ahead of Ordinary Shares and equally among themselves and with all other existing Additional Tier 1 Capital Securities of Westpac, but behind the claims of Senior Creditors (including depositors and all holders of Westpac’s senior or subordinated debt). However, the ranking of the Notes will be adversely affected if a Capital Trigger Event or Non-Viability Trigger Event occurs.
  • The Notes will qualify as Additional Tier 1 Capital of the Westpac Group.
     

There can be no certainty that Westpac will choose to Redeem the Notes earlier or that APRA will provide its approval to any proposed Redemption.
 

The Notes are not deposit liabilities or protected accounts of Westpac for the purposes of the Banking Act 1959 (Cth) or 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). Therefore, the Notes are not guaranteed or insured by any Australian government, government agency or compensation scheme of Australia or any jurisdiction.
 

The Notes are subject to investment risk. Information about the key risks of investing in the Notes and in Westpac is set out in the Prospectus. This website only contains a summary of the key features and risks relating to the Notes. Further details on the Notes may be found in the Prospectus.
 

The Notes have not been, and will not be, registered under the US Securities Act or the securities laws of any state 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.

 

Footnotes

1. Distributions are subject to the satisfaction of the Distribution Payment Conditions – see Prospectus section 2.1.9.

2. Your ability to use the franking credits, either as an offset to your tax liability or by claiming a refund after the end of the year of income, will depend on your individual tax position. You should be aware that the potential value of the franking credits does not accrue to you at the same time as you receive the cash Distribution.

Key dates

Issue Date of Notes 8 September 2015
Commencement of deferred settlement trading 9 September 2015
Holding Statements dispatched by 14 September 2015
Commencement of normal settlement trading 15 September 2015
Record date for first Distribution 14 December 2015
First Distribution Payment Date1 22 December 2015
Option for Westpac to Convert, Redeem2 or Transfer Notes 22 March 2021
Scheduled Conversion Date3 22 March 2023

 

Footnotes

1. Distributions are payable quarterly, subject to satisfaction of the Distribution Payment Conditions – see Prospectus section 2.1.9.

2. There can be no certainty that APRA will provide its prior written approval for any such Redemption.

3. Conversion of the Notes into Ordinary Shares on this date is subject to satisfaction of the Scheduled Conversion Conditions – see Prospectus section 2.2.3.

Distributions on Westpac Capital Notes 3

The Notes pay fully franked floating rate Distributions quarterly in arrear (subject to the Distribution Payment Conditions) and are expected to be paid on 22 March, 22 June,  22 September and 22 December of each year, until the Notes are Converted or Redeemed, commencing on 22 December 2015. If any of these scheduled dates is not a Business Day, then the Distribution will be paid on the next Business Day without any interest in respect of the delay.

The Distribution Rate is calculated each quarter as the sum of the 90 day Bank Bill Rate plus the Margin, together multiplied by (1 – Tax Rate). The formula can be summarised as: (90 day Bank Bill Rate + Margin) x (1 - Tax Rate).

The Distribution Rate will vary each quarter based on changes in the 90 day Bank Bill Rate. The Margin is 4.00% per annum and will not change.

The Bank Bill Rate is set on the first Business Day of each Distribution Period (which for the first Distribution Period is the Issue Date).

The first Distribution Period will run from (but excluding) the Issue Date to (and including) 22 December 2015. Thereafter, each Distribution Period runs from (but excluding) the previous Distribution Payment Date to (and including) the next Distribution Payment Date.

Holders are expected to receive cash Distributions and franking credits. Your ability to use franking credits will depend on your individual tax position. The potential value of the franking credits does not accrue to you at the same time as you receive the cash Distribution.

Distributions are within the absolute discretion of Westpac and only payable subject to the Distribution Payment Conditions. Distributions may not always be paid.

Distribution payments and record dates

Distribution Payment Dates Relevant Record Dates Ex-distribution dates
22 September 2016 14 September 2016 13 September 2016

Distribution payment history

Distribution payment date Distribution rate per annum Cash amount of Distribution per Westpac Capital Note 3 Number of days in the Distribution Period
22 September 2016 4.2000%1 $1.0586 92
22 June 2016 4.4123% $1.1121 92
22 March 2016 3.7940% $0.9459 91
22 December 2015 4.3155% $1.2414 105

Footnotes

1. Expected distribution rate

Prospectus and Notes Deed Poll

Westpac Capital Notes 3 Prospectus (PDF 2MB) (lodged with ASIC on 6 August 2015).
Westpac Capital Notes 3 Deed Poll (PDF 469KB) relating to Westpac Capital Notes 3. You may also refer to the Prospectus for information regarding the Notes Deed Poll.

Full details of the Notes are set out in the Prospectus. Nothing contained on this website or in the Prospectus constitutes financial product advice, investment advice or a recommendation to invest in the Notes. This website and the Prospectus have been prepared without taking into account your investment objectives, financial situation or particular needs. You should read the Prospectus in its entirety (paying special attention to the risks) before deciding whether to purchase for the Notes. If you have any questions about the Notes, you should consult your professional adviser.

ATO Class Ruling

On 19 August 2015, the Australian Taxation Office issued a Class Ruling, which confirms the Australian tax consequences for certain holders of Westpac Capital Notes 3. You can view a copy of the Class Ruling here (PDF 218KB).

Westpac Capital Notes 3 Announcements and related

  1. ASX Announcement dated 8 September 2015: Westpac raises $1.32billion from Westpac Capital Notes 3 (PDF 435KB)
  2. Replacement Prospectus dated 6 August 2015 (PDF 2MB)
  3. ASX Announcement of Bookbuild and Margin dated 5 August 2015 (PDF 310KB)
  4. ASX announcement of Offer dated 27 July 2015 (PDF 146KB)
  5. Investor Presentation dated 27 July 2015 (PDF 2MB)
  6. Postcard sent to Eligible Securityholders dated 27 July 2015 (PDF 33KB)

Guidance for retail investors

ASIC Guidance

Further guidance on investing in bank hybrid securities can be found on ASIC’s MoneySmart website. Their website also has a hybrid securities quiz that you can use to test your knowledge.

A free copy of the ASIC guidance may be obtained by calling ASIC on 1300 300 630 (from Australia) or +61 3 5177 3988 (from outside Australia).

ASIC have recently published a report called "Investing in hybrid securities: Explanations based on behavioural economics" which may also be relevant to your consideration of the Notes. It is available via the link above and on the ASIC website and provides preliminary insight into the behavioural biases and risk attitudes that influence investment in hybrid securities.

Westpac's Guide to Bank Hybrids

A web-based guide to help investors understand some of the typical features and risks associated with an investment in bank hybrid securities is available at Westpac’s Guide to Bank Hybrids. The Guide to Bank Hybrids provides a brief overview of hybrid investments, including how to invest in an Australian bank and the typical features and risks of different types of bank hybrids. The Guide to Bank Hybrids may be helpful when you are considering an investment in the Notes.

 

Things you should know

More information

If you have any questions regarding the Offer, please call the Westpac Capital Notes 3 Information Line on 1300 206 701 (Monday to Friday, 8.30am to 5.30pm, Sydney time).

Terms and conditions of website

Unless otherwise defined, capitalised terms used on this website have the same meaning as those in the Prospectus.

Terms and Conditions document (PDF 225KB)