Westpac Capital Notes 6
Westpac Capital Notes 6 (WCN6) are fully paid, non-cumulative, convertible, transferable, redeemable, subordinated, perpetual, unsecured notes issued by Westpac which trade on the ASX under the ASX code WBCPI. Westpac Banking Corporation (Westpac) issued approximately $1.42 billion of WCN 6 on 18 December 2018.
On 20 November 2023, Westpac announced the offer of a new ASX listed hybrid security, Westpac Capital Notes 10 (WCN 10) (Offer), which are expected to trade on ASX under the code WBCPM.
WCN 6 Reinvestment Offer
The Offer includes a Reinvestment Offer to Eligible WCN 6 Holders1 wishing to reinvest all or some of their WCN 6 in WCN 10. WCN 6 that are reinvested in WCN 10 under the Reinvestment Offer are referred to as Participating WCN 6.
All applications under the Offer can only be made through a Syndicate Broker, and by investors who meet the eligibility requirements and received an Allocation of Notes from a Syndicate Broker under the Bookbuild. The Bookbuild closed on 22 November 2023.
Investors who received an allocation from their Syndicate Broker under the Bookbuild should speak to their Syndicate Broker to make an Application during the Offer Period.
The Offer is expected to close at 5.00pm (Sydney time) on 12 December 2023.
Further details of the Offer can be found in Section 3 and 4 of the WCN 10 Prospectus available via the WCN 10 webpage.
Non-Participating WCN 6
WCN 6 that are not reinvested in WCN 10 under the Reinvestment Offer are referred to as Non-Participating WCN 6. Westpac intends to issue a redemption notice to redeem2 all Non-Participating WCN 6 (for $100 per WCN 6) on 31 July 2024, in accordance with the WCN 6 terms. Further details can be found in Section 3 of the WCN 10 Prospectus available via the WCN 10 webpage.
1 An Eligible WCN 6 Holder is an investor who (i) is a registered holder of WCN 6 who is shown on the Register at 7.00pm (Sydney time) on 10 November 2023 as having an address in Australia; and (ii) is a company or an individual (including as a trustee of a family, hybrid or unit trust) aged 18 years or older; and (iii) has an Australian residential address; and (iv) is either within the Target Market and has received personal advice from a financial adviser to acquire WCN 10, or a Wholesale Client.
2 APRA has approved the redemption of WCN 6. The intended redemption of WCN 6 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).
Amendments to Westpac Capital Notes 6 Terms, Letter to Eligible Westpac Capital Notes 6 Holders, Transfer Notice
On 20 November 2023, Westpac lodged the following documents on the ASX:
- Amendments to the WCN 6 Terms, primarily to facilitate the Reinvestment Offer;
- A letter to WCN 6 Holders, including a description of the Reinvestment Offer and a Transfer Notice regarding any Participating WCN 6.
These announcements are available below:
Nominated Party Deed Poll
A copy of the Nominated Party Deed Poll, containing the undertaking by the Nominated Party to acquire each Participating WCN 6 for $100 is available below.
Distributions on Westpac Capital Notes 6
WCN6 pay fully franked, non-cumulative floating rate Distributions quarterly in arrear (subject to the Distribution Payment Conditions). Distributions are expected to be paid on 18 March, 18 June, 18 September and 18 December of each year (commencing on 18 March 2019), until the WCN6 are Converted or Redeemed.
Distribution Rate = (3 month BBSW Rate + Margin) x (1 - Tax Rate)
The Margin is 3.70% per annum and will not change.
Upcoming payment and record dates
|Distribution payment date||Relevant record date||Ex-distribution date|
|18 December 2023||8 December 2023||7 December 2023|
Distribution payment history
|Distribution payment date||Distribution rate per annum||Cash amount of Distribution per Westpac Capital Notes 6||Number of days in the Distribution period|
|18 December 2023||5.4779%1||$1.36571||91|
|18 September 2023||5.6107%||$1.4142||92|
|19 June 2023||5.1720%||$1.3036||92|
|20 March 2023||4.8310%||$1.1912||90|
|19 December 2022||4.5787%||$1.1415||91|
|19 September 2022||3.8753%||$0.9768||92|
|20 June 2022||2.7161%||$0.6846||92|
|18 March 2022||2.6355%||$0.6498||90|
|20 December 2021||2.5990%||$0.6480||91|
|20 September 2021||2.6097%||$0.6578||92|
|18 June 2021||2.6105%||$0.6580||92|
|18 March 2021||2.5997%||$0.6410||90|
|18 December 2020||2.6530%||$0.6614||91|
|18 September 2020||2.6635%||$0.6713||92|
|18 June 2020||3.0454%||$0.7676||92|
|18 March 2020||3.2130%||$0.8010||91|
|18 December 2019||3.2711%||$0.8155||91|
|18 September 2019||3.4727%||$0.8753||92|
|18 June 2019||3.8732%||$0.9763||92|
|18 March 2019||4.0129%||$0.9895||90|
|1. Expected amount/rate|
Key features of the WCN6
|Term||Perpetual, however, WCN6 may be Converted, Redeemed or Transferred as outlined below.|
|Scheduled Conversion||Scheduled to Convert into Ordinary Shares on 31 July 2026 subject to the satisfaction of the Scheduled Conversion Conditions.
Please see Section 2.2 of the Prospectus for further information about Conversion on the Scheduled Conversion Date.
Westpac may elect to Convert into Ordinary Shares (subject to certain conditions), Redeem (if APRA gives its prior written approval, which may or may not be given), or Transfer:
Please see Sections 2.3 and 2.4 of the Prospectus for further information about optional Conversion, Redemption and Transfer.
|Capital or Non-Viability Trigger Events||
Westpac must Convert all or some of WCN6 into Ordinary Shares immediately upon a Capital Trigger Event or a Non-Viability Trigger Event. The number of Ordinary Shares that Holders receive in these circumstances is limited by a Maximum Conversion Number (as required by APRA) and Holders may suffer loss as a consequence.
If Conversion does not occur for any reason by 5.00pm on the fifth Business Day after the Capital Trigger Event Conversion Date or Non-Viability Trigger Event Conversion Date (as the case may be), all rights attached WCN6 will be terminated and the investment will lose all of its value.
Please see Section 2.5 of the Prospectus for further information about Conversion upon a Capital Trigger Event and Non-Viability Trigger Event.
|Acquisition Event||Westpac must Convert all WCN6 into Ordinary Shares following an Acquisition Event, subject to certain conditions.
Please see Section 2.6 of the Prospectus for further information about Conversion upon an Acquisition Event.
|Holders' right to request early Conversion/Redemption/Transfer||Holders have no right to request Conversion, Redemption or Transfer for any reason. To realise their investment, Holders may sell their WCN6 on ASX at the prevailing market price. Westpac does not guarantee that Holders will be able to sell WCN6 on ASX at an acceptable price or at all.|
In the event of a Winding Up, if WCN6 are still on issue and have not been Redeemed or Converted, or otherwise had the rights attaching to them terminated, they will rank for payment:
However, it is likely that a Capital Trigger Event or Non-Viability Trigger Event would occur prior to a Winding Up and WCN6 would have been Converted into Ordinary Shares or otherwise had the rights attaching to them terminated.
There are risks associated with an investment in WCN6, many of which are outside the control of Westpac. These risks and uncertainties include those referred to in the Prospectus, but they may not be the only ones Westpac faces.
Please see Section 5 of the Prospectus for further information about some of the key risks of investing in WCN6 and in Westpac.
WCN6 are not deposit liabilities or protected accounts of Westpac for the purposes of the Banking Act 1959 (Cth) 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). Therefore, WCN6 are not guaranteed or insured by the Australian Government, any government agency or compensation scheme of Australia or any jurisdiction.
WCN6 have not been, and will not be, registered under the U.S. Securities Act of 1933 (U.S. 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 U.S. person (as defined in Regulation S under the U.S. Securities Act). None of the Prospectus, or any Application Form or any other materials relating to the Offer may be distributed in the United States.
Key dates for Westpac Capital Notes 6
|Issue Date||18 December 2018|
|Option for Westpac to Convert2, Redeem3 or Transfer WCN6||31 July 2024|
|Scheduled Conversion Date4||31 July 2026|
Prospectus and Notes Deed Poll
Announcements and investor presentation
ATO Class Ruling
On 16 January 2019, the Australian Taxation Office issued a Class Ruling, which confirms the Australian tax consequences for certain holders of Westpac Capital Notes 6. You can view a copy of the Class Ruling here.
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
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.
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 deciding whether to invest in Notes, you should read the Prospectus in its entirety (including the investment risks in Sections 1.5 and 5) and seek professional advice from a financial adviser or other professional adviser.
You can speak to your stockbroker, solicitor, accountant or other independent and qualified professional adviser about the Offer and the Notes. You can also find a financial adviser that suits you on the following websites:
- https://www.moneysmart.gov.au/investing/financial-advice/choosing-a-financial-adviser; or
Please be aware that consultation with a financial adviser will likely incur fees and costs and may take time to complete.
Things you should know
If you have any questions regarding the Notes, please call the Westpac Capital Notes 6 Information Line (Monday to Friday, 8.30am to 5.30pm, Sydney time) on 1300 653 497 (within Australia) and +61 1300 653 497 (from outside Australia).
Unless otherwise defined, capitalised terms used on this website have the same meaning as those in the Prospectus. A reference to ‘Prospectus’ on this website is a reference to either the original Prospectus or any supplementary or replacement Prospectus (including the electronic form of the Prospectus) in relation to the Offer (as the context requires).