ANZ CPS3 – The new notes issue from the ANZ

 By Jason Fittler

Proposed ASX Code: ANZPC 

CPS3 are preference shares issued by ANZ.  They wish to issue 12.5 million CPS3 to raise $1.25 billion.  They will mandatorily convert into Ordinary Shares on 1 September 2019 as long as certain conditions are met.  If these conditions are not me then the shares will convert on the first dividend payment date after all conditions being met. 

Dividends are preferred, non-cumulative, based on a floating rate and are expected to be fully or substantially franked.  Dividends are subject to the Directors absolute discretion and are scheduled to be paid six-monthly in arrears. The interest rate is the Bank Bill Rate plus a Margin of 3.10%.  The Dividends are expected to be fully or substantially franked

ANZ must convert CPS3 if its Common Equity Capital Ration as prescribed by APRA falls below 5.125%.  The mandatory conversion provisions do not apply in these circumstances. If ANZ is wound up, CPS3 rank for payment ahead of Ordinary Shares and equally with CPS 1 and CPS2, equally with preference shares but behind all senior ranking securities and all depositors and other creditors of ANZ.

Key Dates

Closing Date for ANZ and general offer                                5pm 21 September 2011

Issue Date                                                                        28 September 2011

First 6 monthly Dividend Payment Date                               1 March 2012

First Optional Exchange Date                                              1 September 2017

Mandatory Conversion Date                                                1 September 2019

Issue Price:  $100 per CPS3

Minimum Parcel: 50 CPS3 ($5,000)

Additional Parcels: Additional parcels are to be purchased in 10 CPS3 lots for incremental multiples of at least $1,000.

Margin: Bank Bill Rate plus the Margin of 3.10%

For more information please contact us on 07 4771 4577.