Westpac Banking Corporation has completed the Offer of Westpac Capital Notes 6 (Notes). Approximately 14.2 million Notes were issued on 18 December 2018 at $100 each, raising approximately $1.42 billion.
The Notes commenced trading on the ASX on a normal settlement basis on 24 December 2018 under the ASX code WBCPI.
Holding Statements, with details of Notes Allocated and any refund of Application Payments as a result of scaling or from invalid Applications, were dispatched on 21 December 2018.
About Westpac Capital Notes 6
The Notes are subordinated, unsecured notes issued by Westpac and are expected to provide investors with fully franked, floating rate, non-cumulative distributions paid quarterly. The Notes are quoted on the ASX under the code WBCPI.
Each Note has an Issue Price of $100 and a Margin of 3.70% per annum, which was determined via a Bookbuild.
The Notes will qualify as Additional Tier 1 Capital under the Australian Prudential Regulation Authority’s (APRA) capital adequacy framework.
Please see the Frequently Asked Questions webpage for further information on Allotment and any refunds, ASX quotation, Holding Statements and payments on Westpac Capital Notes.
Upcoming payment and record dates
| Distribution payment date | Relevant record date | Ex-distribution date |
|---|---|---|
| 18 March 2019 | 8 March 2019 | 7 March 2019 |
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 March 2019 | 4.0129%1 | $0.98951 | 90 |
| 1 Expected amount/rate | |||
Key features of the Notes
| Distributions | The Distribution Rate is a floating rate to be determined quarterly as the sum of the three month BBSW Rate per annum plus the Margin per annum, together multiplied by (1 - Tax Rate). The Distributions are non-cumulative and are expected to be paid quarterly in arrear, subject to the satisfaction of the Distribution Payment Conditions, which include that Distributions are at Westpac’s absolute discretion. Distributions are expected to be fully franked with the first Distribution scheduled to be paid on 18 March 2019. Please see Section 2.1 of the Prospectus for further information about Distributions. |
| Margin |
The Margin is 3.70% per annum. The Margin was determined via a Bookbuild and will not change. Please see Section 2.1 of the Prospectus for further information about the Margin. |
| Term | Perpetual, however, the Notes 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. |
| Optional Conversion/Redemption/Transfer | 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 the Notes 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 to the Notes 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 of the Notes 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 Notes on ASX at the prevailing market price. Westpac does not guarantee that Holders will be able to sell Notes on ASX at an acceptable price or at all. |
| Winding Up | In the event of a Winding Up, if the Notes 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 the Notes would have been Converted into Ordinary Shares or otherwise had the rights attaching to them terminated. |
| Risks | There are risks associated with an investment in the Notes, 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 the Notes and in Westpac. |
CAUTION - Westpac Capital Notes 6 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 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, the Notes are not guaranteed or insured by the Australian Government, any government agency or compensation scheme of Australia or any jurisdiction.
The Notes 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 the Offer
| Record date for determining Eligible Securityholders (7.00pm Sydney time) | 5 November 2018 |
| Announcement of the Offer and lodgement of the Prospectus with ASIC | 12 November 2018 |
| Bookbuild | 19 November 2018 |
| Announcement of Margin | 19 November 2018 |
| Lodgement of replacement Prospectus with ASIC | 20 November 2018 |
| Opening Date | 20 November 2018 |
| Closing Date for the Securityholder Offer (5.00pm Sydney time) | 11 December 2018 |
| Closing Date for the Broker Firm Offer (5.00pm Sydney time) | 11 December 2018 |
| Issue Date of Notes | 18 December 2018 |
| Commencement of deferred settlement trading | 19 December 2018 |
| Holding Statements dispatched by | 21 December 2018 |
| Commencement of normal settlement trading | 24 December 2018 |
Key dates for Westpac Capital Notes 6
| Record Date for first Distribution | 8 March 2019 |
| First Distribution Payment Date1 | 18 March 2019 |
| Option for Westpac to Convert2, Redeem3 or Transfer the Notes | 31 July 2024 |
| Scheduled Conversion Date4 | 31 July 2026 |
Key dates for the Reinvestment Offer
| Reinvestment Offer Record Date for determining Eligible Westpac Capital Notes Holders (7.00pm Sydney time) | 5 November 2018 |
| Opening Date for the Reinvestment Offer | 20 November 2018 |
| Ex-date for Pro-Rata Westpac Capital Notes Distribution | 10 December 2018 |
| Record date for Pro-Rata Westpac Capital Notes Distribution (7.00pm Sydney time) | 11 December 2018 |
| Closing Date for the Reinvestment Offer (5.00pm Sydney time) | 11 December 2018 |
| Date of transfer of Participating Westpac Capital Notes to Westpac Capital Notes Nominated Party | 18 December 2018 |
| Issue Date of Notes for the Reinvestment Offer | 18 December 2018 |
| Payment date for Pro-Rata Westpac Capital Notes Distribution | 18 December 2018 |
Key dates for Non-Participating Westpac Capital Notes
| Ex-date for Pro-Rata Westpac Capital Notes Distribution | 10 December 2018 |
| Record date for Pro-Rata Westpac Capital Notes Distribution (7.00pm Sydney time) | 11 December 2018 |
| Payment date for Pro-Rata Westpac Capital Notes Distribution | 18 December 2018 |
| Ex-date for intended Final Westpac Capital Notes Distribution on Non-Participating Westpac Capital Notes | 27 February 2019 |
| Record date for intended Final Westpac Capital Notes Distribution on Non-Participating Westpac Capital Notes (7.00pm Sydney time) | 28 February 2019 |
| Last day of trading in Westpac Capital Notes | 28 February 2019 |
| Payment date for intended Final Westpac Capital Notes Distribution5 on Non-Participating Westpac Capital Notes | 8 March 2019 |
| Expected date of transfer of Non-Participating Westpac Capital Notes to Westpac Capital Notes Nominated Party | 8 March 2019 |
These dates are indicative only and may change. Except as otherwise specified in the Westpac Capital Notes 6 Terms, if any of these dates are not Business Days and an event under the Westpac Capital Notes 6 Terms is stipulated to occur on that date, then the event will occur on the next Business Day.
1. Distributions are payable quarterly, subject to satisfaction of the Distribution Payment Conditions – see Prospectus Section 2.1.9.
2. Subject to satisfaction of the Optional Conversion Restriction – see Prospectus Section 2.4.2.
3. There can be no certainty that APRA will provide its prior written approval for any such Redemption.
4. Conversion of the Notes to Ordinary Shares on this date is subject to satisfaction of the Scheduled Conversion Conditions – see Prospectus Section 2.2.3.
5. Subject to satisfaction of the distribution payment conditions in the Westpac Capital Notes Terms.
Prospectus and Notes Deed Poll
Prospectus (PDF 1MB), relating to Westpac Capital Notes 6, dated 20 November 2018.
Notes Deed Poll (PDF 1MB), relating to Westpac Capital Notes 6, dated 19 November 2018.
Refer to the Prospectus for information regarding the Notes Deed Poll.
Announcements and investor presentation
- ASX Westpac Capital Notes 6 Issue Announcement, 18 December 2018 (PDF 419KB)
- ASX Westpac Capital Notes 6 Completion of Bookbuild, 19 November (PDF 90KB)
- ASX Westpac Capital Notes 6 Offer Announcement, 12 November 2018 (PDF 71KB)
- ASX Westpac Capital Notes 6 Investor Presentation, 12 November 2018 (PDF 1MB)
- ASX Letter to Eligible Westpac Capital Notes Holders and Transfer Notice, 12 November 2018 (PDF 445KB)
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. ATO Class Ruling (PDF 213KB)
Enquiries
If you have any questions in relation to to the Westpac Capital Notes 6, 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); or
- contact your financial adviser or other professional adviser.
Please note, the Westpac Capital Notes 6 Offer closed at 5.00pm on 11 December 2018. Applications are no longer being accepted.
Information for Westpac Capital Notes Holders
Westpac made amendments to the Westpac Capital Notes Terms primarily to facilitate the Reinvestment Offer, as permitted under the Westpac Capital Notes Terms. The amended Westpac Capital Notes Terms were lodged on ASX on 12 November 2018 and are also available on the Westpac Capital Notes website www.westpac.com.au/westpaccapnotes
If you have any questions regarding your Westpac Capital Notes holding, please call the Westpac Capital Notes 6 Information Line (Monday to Friday, 8.30am to 5.30pm, Sydney time) on 1300 653 497.
Guidance for retail investors
ASIC Guidance
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.
Professional 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 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
- https://fpa.com.au/find-a-planner/
Please be aware that consultation with a financial adviser will likely incur fees and costs and may take time to complete.
Terms and conditions of website
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).