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Westpac Capital Notes

Introduction

The Westpac Capital Notes Offer is closed. Westpac Capital Notes trade under the ASX code “WBCPD”. On 8 March 2013, Westpac issued 13,835,690 Westpac Capital Notes, at an Issue Price of $100 each, raising approximately A$1.38 billion of Tier 1 capital.

What are Westpac Capital Notes?

Westpac Capital Notes:

  • Are fully paid, non-cumulative, convertible, transferable, redeemable, subordinated, perpetual, unsecured notes issued by Westpac, which, if they are on issue at the time, rank in priority to Ordinary Shares in a Winding Up;
  • Offer Holders non-cumulative, floating rate Distributions expected to be paid quarterly in arrear, which are expected to be fully franked. The Distribution Rate is based on a Margin over the 90 day Bank Bill Rate, which is set on the first Business Day of each Distribution Period1. The Margin has been set at 3.20% per annum. Distributions are within the absolute discretion of Westpac and only payable subject to the satisfaction of the Distribution Payment Conditions. Distributions may not be paid; 
  • Convert into Ordinary Shares on the Scheduled Conversion Date, subject to the Scheduled Conversion Conditions being satisfied (the first possible Scheduled Conversion Date is 8 March 2021); 
  • Are subject to earlier Conversion upon a Capital Trigger Event, Non-Viability Trigger Event or an Acquisition Event2
  • May be Redeemed or Transferred at Westpac’s election on 8 March 2019 or Redeemed earlier for Franking, Tax or Regulatory Events. Redemption is subject to APRA’s prior written approval3;  
  • Do not give holders a right to request Conversion, Redemption or Transfer. To realise their investment, Holders must sell their Westpac Capital Notes on ASX at the prevailing market price4; and 
  • Qualify as Additional Tier 1 Capital to satisfy Westpac's regulatory capital requirements.

 

Westpac Capital Notes are not guaranteed or secured. They are also 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).

Further details on Westpac Capital Notes can be found in the Prospectus (including in the Westpac Capital Notes Terms at Appendix B of the Prospectus).

 

Key dates

Issue date 8 March 2013
Holding Statements dispatched by 15 March 2013
Normal settlement trading on ASX commenced on 18 March 2013
Record date for first Distribution 31 May 2013
First Distribution Payment Date4,5 8 June 2013
Optional Redemption/Transfer Date3 8 March 2019
Scheduled Conversion Date6 8 March 2021

Footnotes
1. Except for the first Distribution Period, where the 90 day Bank Bill Rate will be determined on the Issue Date. 
2. Subject to the Second Scheduled Conversion Condition being satisfied as adjusted for an Acquisition Event. 
3. There can be no certainty that APRA will provide its prior written approval. 
4. Distributions are payable quarterly, subject to the satisfaction of the Distribution payment Conditions. 
5. The first Distribution Payment Date, being 8 June 2013, is not a Business Day, accordingly the expected first Distribution will be made on the next Business Day, being 11 June 2013.
6. Conversion of the Westpac Capital Notes to Ordinary Shares on this date is subject to the satisfaction of the Scheduled Conversion Conditions.
7. The potential value of franking credits does not accrue to Holders at the same time as Holders receive the cash Distributions, and a Holder's ability to use the franking credits will depend on that Holder's individual tax position.

 

Distributions on Westpac Capital Notes

Westpac Capital Notes offer Holders non-cumulative, floating rate Distributions expected to be paid quarterly in arrear, on 8 March, 8 June, 8 September and 8 December, commencing on 8 June 2013. As the first Distribution Payment Date, 8 June 2013, is not a Business Day, it is expected that the first Distribution will be made on the next Business Day, being 11 June 2013.

Payment of Distributions are within the absolute discretion of Westpac, which means Westpac does not have to pay them. Distributions are also only payable if the Distribution Payment Conditions are satisfied.

Distributions are expected to be fully franked and accordingly Holders are expected to receive cash Distributions and franking credits7. Distributions are calculated as follows:

(Distribution Rate x Face Value x N) divided by 365

  • The Face Value is $100.00 per Westpac Capital Note.
  • N is the number of days in the Distribution Period, being the period from (but excluding) the previous Distribution Payment Date, or from (but excluding) the Issue Date in the case of the first Distribution Period, to (and including) the next Distribution Payment Date.

The Distribution Rate is a floating rate based on a Margin over the 90 day Bank Bill Rate, calculated using the following formula:

(90 day Bank Bill Rate + Margin) x (1 – Tax Rate)

  • The 90 day Bank Bill Rate is set on the first Business Day of each Distribution Period, except for the first Distribution Period, where the 90 day Bank Bill Rate was determined on the Issue Date.
  • The Margin is 3.20% per annum.
  • The Tax Rate is the Australian corporate tax rate applicable to the franking account of Westpac as at the relevant Distribution Payment Date expressed as a decimal in the formula, 0.30.

The Distribution Rate and the 90 day Bank Bill Rate for each Distribution Period will be announced to ASX and will be available on this website.

 

Distribution payment and record dates

Distribution payment date Relevant record date Ex-distribution date
8 December 2016 30 November 2016 29 November 2016

 

Distribution payment history

Distribution payment date Distribution rate per annum Cash amount of Distribution per Westpac Capital Note Number of days in the    distribution period
8 December 2016 3.4475%8 $0.85958 91
8 September 2016 3.6575% $0.9219 92
8 June 2016 3.8640% $0.9739 92
8 March 2016 3.8500% $0.9599 91
8 December 2015 3.7555% $0.9363 91
8 September 2015 3.7403% $0.9428 92
9 June 2015 3.8710% $0.9757 92
10 March 20159 4.1440% $1.0218 90
8 December 2014 4.0775% $1.0166 91
8 September 2014 4.1148% $1.0372 92
10 June 20149 4.0915% $1.0313 92
11 March 2014 4.0518% $0.9991 90
9 December 20139 4.0423% $1.0078 91
9 September 20139 4.1796% 1.0535 92
11 June 2013 4.3540% 1.0974 92

Footnotes
8. Expected rate/ amount per note
9. The scheduled Distribution Payment Date is not a Business Day. In accordance with the terms, the Distribution Payment will be made on the next Business Day. 

 

Conversion of Westpac Capital Notes

Westpac Capital Notes will be Converted into Ordinary Shares on the Scheduled Conversion Date subject to the Scheduled Conversion Conditions being satisfied. The first possible Scheduled Conversion Date will be 8 March 2021. Westpac Capital Notes can also be Converted earlier upon a Capital Trigger Event, Non-Viability Trigger Event or an Acquisition Event2.

Early redemption of Westpac Capital Notes by Westpac

Westpac Capital Notes may be Redeemed or Transferred at Westpac’s election on 8 March 2019 or Redeemed earlier for Franking, Tax or Regulatory Events. Redemption is subject to APRA’s prior written approval3. Holders of the Westpac Capital Notes have no right to request Conversion, Redemption or Transfer. To realise their investment, Holders must sell their Westpac Capital Notes on ASX at the prevailing market price.

Prospectus and Notes Deed Poll

An electronic copy of the Westpac Capital Notes Prospectus (PDF 1MB) was lodged with the Australian Securities and Investments Commission ("ASIC") on 7 February 2013.

The Notes Deed Poll relating to the Westpac Capital Notes (PDF 352KB) was executed on 30 January 2013.

Link Market Services Limited (as the Registry) holds the original executed Notes Deed Poll on behalf of each registered holder of Westpac Capital Notes. Refer to Section 2.13 of the Prospectus for information regarding the Notes Deed Poll. 

ATO Class Ruling

On 6 March 2013, the Australian Tax Office issued a Class Ruling which confirms the Australian tax consequences for certain Holders of Westpac Capital Notes. You can view a copy of the Class Ruling here (PDF 177KB)

ASX announcements and Investor Presentation

Media Release relating to the close of the Westpac Capital Notes Offer (PDF 61KB) - 8 March 2013
Media Release relating to the announcement of the Margin (PDF 61KB) - 6 February 2013 
Media Release relating to the offer of Westpac Capital Notes (PDF 270KB) - 30 January 2013
Westpac Capital Notes Investor Presentation (PDF 1MB) - 30 January 2013

ASIC guidance for retail investors

ASIC has published guidance which may be relevant to your investment in Westpac Capital Notes, namely information for retail investors who are considering investing in hybrid securities called “Hybrid securities and notes” (under the heading “Complex investments” at www.moneysmart.gov.au/investing).

Free copies of the ASIC guidance can be obtained from ASIC’s website at www.moneysmart.gov.au/investing or by calling ASIC on +61 1300 300 630 (local call cost within Australia).   

Westpac's Guide to Bank Hybrids 

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 hybrid capital securities. 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 a bank hybrid.

Things you should know

More Information

If you have any questions regarding your investment in Westpac Capital Notes, please call the Westpac Capital Notes Information Line on 1300 133 814

(Monday to Friday, 8.30am to 7.30pm, Sydney time).

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

Terms and Conditions of website

Terms & Conditions - Westpac Capital Notes (PDF 34KB)