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".
Redemption Notice for Westpac Capital Notes 3
On 15 February 2021, Westpac notified holders that on 22 March 2021 (being the optional conversion/redemption/transfer date of the Notes) Westpac will redeem all outstanding Notes that remain on issue.
The letter to Notes holders and the redemption notice can be found here:
Notes holders will be paid $100 for each Note held on 22 March 2021. Holders will also be paid the final distribution of $0.6921 per Note, fully franked, on any Notes held as at 7.00pm (Sydney time) on the record date of 12 March 2021, provided the distribution payment conditions in the Terms are satisfied.
Westpac Capital Notes 7 Reinvestment Offer
On 4 November 2020, Westpac Banking Corporation (Westpac) announced the offer of a new hybrid security known as Westpac Capital Notes 7 (WCN7) (Offer), WCN 7 are quoted on ASX under ASX code WBCPJ. WCN7 were issued on 4 December 2021.
The Offer included a Reinvestment Offer to Eligible Westpac Capital Notes 3 Holders1 to apply to reinvest all or some of their Westpac Capital Notes 3 in WCN7 (and apply for additional WCN7).
Further details can be found in the WCN7 prospectus available via the WCN7 webpage.
1 Eligible Westpac Capital Notes 3 Holders were registered holders of Westpac Capital Notes 3 shown on the Register at 7.00pm (Sydney time) on 28 October 2020 to have an address in Australia.
Amendments to Westpac Capital Notes 3 Terms, Letter to Eligible Westpac Capital Notes 3 Holders and Transfer Notice
On 4 November 2020, Westpac released the following documents on ASX:
1. Amendments to the Westpac Capital Notes 3 Terms, primarily to facilitate the Reinvestment Offer;
2. A letter to Eligible Westpac Capital Notes 3 Holders including a description of the Reinvestment Offer; and
3. A Transfer Notice regarding any Westpac Capital Notes 3 reinvested under the Reinvestment Offer.
These announcements are available below:
Nominated Party Deed Poll
A copy of the Deed Poll, containing the undertaking by the Nominated Party to acquire each Participating Westpac Capital Note 3 for $100 is available below.
Key features of Westpac Capital Notes 3
- 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.
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.
|Issue Date of Notes||8 September 2015|
|Commencement of normal settlement trading||15 September 2015|
|Option for Westpac to Convert, Redeem1 or Transfer Notes||22 March 2021|
|Scheduled Conversion Date2||22 March 2023|
1 There can be no certainty that APRA will provide its prior written approval for any such Redemption.
2 Conversion of the Notes to Ordinary Shares on this date is subject to satisfaction of the Scheduled Conversion Conditions.
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.
Upcoming payment and record dates
|Distribution payment date||Relevant record date||Ex-distribution date|
|22 March 2021||12 March 2021||11 March 2021|
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 March 2021||2.8070%1||$0.69211||90|
|22 December 20203||2.8630%||$0.1412||18|
|4 December 20202||2.8630%||$0.5726||73|
|22 September 2020||2.8735%||$0.7243||92|
|22 June 2020||3.1240%||$0.7874||92|
|23 March 2020||3.4455%||$0.8590||91|
|23 December 2019||3.4405%||$0.8578||91|
|23 September 2019||3.6295%||$0.9148||92|
|24 June 2019||4.0670%||$1.0251||92|
|22 March 2019||4.2560%||$1.0494||90|
|24 December 2018||4.1545%||$1.0358||91|
|24 September 2018||4.2770%||$1.0780||92|
|22 June 2018||4.1965%||$1.0577||92|
|22 March 2018||4.0565%||$1.0002||90|
|22 December 2017||3.9970%||$0.9965||91|
|22 September 2017||4.0005%||$1.0083||92|
|22 June 2017||4.0565%||$1.0225||92|
|22 March 2017||4.0530%||$0.9994||90|
|22 December 2016||4.0145%||$1.0009||91|
|22 September 2016||4.2000%||$1.0586||92|
|22 June 2016||4.4123%||$1.1121||92|
|22 March 2016||4.4567%||$1.1111||91|
|22 December 2015||4.3155%||$1.2414||105|
1. Expected rate/amount per note
2. First Pro-Rata Westpac Capital Notes 3 Distribution for the period from 23 September 2020 to 4 December 2020, inclusive. Refer to the section above “Pro-Rata and Final Westpac Capital Notes 3 Distribution Payments”.
3. Second Pro-Rata Westpac Capital Notes 3 Distribution for the period from 5 December 2020 to 22 December 2020, inclusive. Refer to the section above “Pro-Rata and Final Westpac Capital Notes 3 Distribution Payments”.
Prospectus and 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
Westpac Capital Notes 3 Announcements
Guidance for retail investors
Further guidance on investing in bank hybrid securities can be found on ASIC’s MoneySmart website.
A free copy of the ASIC guidance may be obtained by calling ASIC on 1300 300 630 (from within Australia) or +61 3 5177 3988 (from outside Australia).
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
If you have any questions regarding the Westpac Capital Notes 3 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.