WESTPAC CAPITAL NOTES 9
Westpac Capital Notes 9 (Notes) are 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 the Australian Prudential Regulation Authority’s (APRA) capital adequacy framework.
Target Market Determination (TMD)
A 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 9
The Notes 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 September 2022), 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 3.40% 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 payment date
|Distribution rate per annum
|Cash amount of Distribution per Westpac Capital Notes 9
|Number of days in the Distribution period
|22 March 2024
|22 December 2023
|22 September 2023
|22 June 2023
|22 March 2023
|22 December 2022
|23 September 2022
1. Expected amount/rate
Key features of Westpac Capital Notes 9
Perpetual, however, the Notes may be Converted, Redeemed or Transferred as outlined below.
Scheduled to Convert into Ordinary Shares on 22 June 2031 subject to the satisfaction of the Scheduled Conversion Conditions.
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:
● all or some of the Notes on 22 September 2028, 22 December 2028, 22 March 2029, or 22 June 2029; or
● all of the Notes following a Tax Event or Regulatory Event.
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 Notes Convert into is limited by a Maximum Conversion Number (as required by APRA) and Holders may suffer loss as a consequence.
Notes must be Converted into Ordinary Shares following an Acquisition Event, subject to certain conditions.
Holders’ right to request early Conversion/Redemption/Transfer
Holders have no right to request Conversion, Redemption or Transfer for any reason.
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:
● ahead of Ordinary Shares;
● equally among themselves and equally with all Equal Ranking Capital Securities; and
● subordinated to Senior Creditors.
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.
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 6 of the Prospectus for further information about some of the key risks of investing in the Notes and in Westpac.
2. The Tax Rate is 30% (or 0.30 expressed as a decimal) as at the time of the Offer but that rate may change.
CAUTION - Westpac Capital Notes 9 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 nor other materials relating to the Offer may be distributed in the United States.
Key dates for Westpac Capital Notes 9
Record Date for first Distribution
14 September 2022
First Distribution Payment Date3,4
22 September 2022
Option for Westpac to Convert5, Redeem6 or Transfer the Notes
22 September 2028
Scheduled Conversion Date7
22 June 2031
Except as otherwise specified in the Westpac Capital Notes 9 Terms, if any of these dates are not Business Days and an event under the Westpac Capital Notes 9 Terms is stipulated to occur on that day, then the event will occur on the next Business Day.
3. Distributions are payable quarterly, subject to satisfaction of the Distribution Payment Conditions – see Section 2.1.9 of the Prospectus.
4. You should note that the first Distribution Period is a shorter period of 64 days and other Distribution Periods will otherwise generally be 90 to 92 days.
5. Subject to satisfaction of the Optional Conversion Restriction – see Section 2.4.2 of the Prospectus.
6. There can be no certainty that APRA will provide its prior written approval for any such Redemption.
7. 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.
Prospectus, Notes Deed Poll and TMD
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 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.
Things you should know
- Speak to your Syndicate Broker.
- Read the Prospectus.
- Westpac Capital Notes 9 Information Line (Monday to Friday, 8.30am to 7.30pm, Sydney time) on 1800 606 866 (free call within Australia) and +61 1800 606 866 (from outside Australia).
Unless otherwise defined, capitalised words 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 in relation to the Offer (as the context requires).
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