Westpac Banking Corporation

Capital Notes 9

Morgans is a Joint Lead Manager to the Offer1

Westpac Banking Corporation ("Westpac") ("Issuer") (ASX:WBC) has announced it is seeking to raise $750 million2  through the issue of Westpac Capital Notes 9 ("Notes"). Westpac Capital Notes 9 are fully paid, non-cumulative, convertible, transferable, redeemable, subordinated, perpetual, unsecured notes issued by Westpac.

The Offer includes a Reinvestment Offer to all eligible Westpac Capital Notes 2 (ASX: WBCPE) Holders who held Westpac Capital Notes 2 on the record date Friday, 10 June 2022. Any outstanding Westpac Capital Notes 2 that are not reinvested are intended to be redeemed by Westpac on 23 September 2022 (subject to various factors including any required regulatory approvals).

Design and Distribution Obligations (DDO)

From 5 October 2021, the Corporations Act imposes obligations on the Issuer to determine an appropriate Target Market for Notes. The distribution of Notes (through both Broker Firm and Reinvestment Offers) is limited to Qualified investors or retail investors receiving personal advice as specified in the Target Market Determination ("TMD"). Morgans as the distributor must take steps which result in the Offer being distributed only to investors that are within the Target Market.

Please contact your Morgans Adviser to discuss the suitability of Westpac Capital Notes 9 given your specific investment objectives, current portfolio holdings and if appropriate secure an allocation.

Westpac Capital Notes 9 are a complex investment and may be difficult to understand, even for experienced investors, and involve different risks from a simple debt or ordinary equity security. You should ensure that you understand the Westpac Capital Note 9 Terms and risks of investing in Westpac Capital Notes 9 and consider whether it is an appropriate investment for your particular circumstances. It is important that you read the Replacement Prospectus in full before deciding to invest in Westpac Capital Notes 9.

Key features of the Offer

  • Opportunity to reinvest Westpac Capital Notes 2 redemption proceeds ($100 per note) into Westpac Capital Notes 9 ($100 per Note) and maintain an exposure to Westpac beyond the expected redemption of Westpac Capital Notes 2 on 23 September 2022
  • Opportunity to participate in the Broker Firm Offer via Morgans as a Joint Lead Manager to the Offer
  • Westpac Capital Notes 9 have a face value of $100 and are redeemable by the Issuer on 22 September 2028, 22 December 2028, 22 March 2029 and 22 June 20293
  • If not redeemed before, Westpac Capital Notes 9 will convert into Ordinary Shares on 22 June 20314
  • Quarterly (fully franked) gross distributions5 equal to the 3 Month Bank Bill Rate plus a margin of 3.40%6 i.e. approximately 5.20%p.a.7
  • Distributions are discretionary, non-cumulative and subject to the Distribution Payment Conditions outlined in the Replacement Prospectus but must be paid ahead of Ordinary Share dividends, and if not paid, dividends and capital restrictions may apply to Ordinary Shares
  • Westpac Capital Notes 9 are APRA eligible regulatory capital instruments and contain both Capital Trigger and Non-Viability Trigger Event conditions which may impact their value in certain circumstances8
  • Are expected to be quoted on the ASX under the code WBCPL9

Issuer: Westpac Banking Corporation (WBC)

Transaction: Capital Notes Offer

Morgans Role: Joint Lead Manager

Offer Size: $1.5 billion

Offer Opening Date: 29 June 2022

Morgans Broker Firm applications closing date: 14 July 2022

Investments in Notes are an investment in Westpac and may be affected by the ongoing performance, financial position and solvency of Westpac. They are not deposit liabilities or protected accounts of Westpac for the purposes of the Banking Act or 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) and are not guaranteed or insured by the Australian government, or any government agency or compensation scheme of Australia or any other jurisdiction.

There are a number of risks associated with an investment in Notes, many of which are outside the control of Westpac. The risks associated with the Notes could result in the loss of your investment and associated income. Before applying for Notes all investors should consider whether Notes are a suitable investment for them including by considering the key risks summarised in Section 1.5 and detailed in Section 6 of the Replacement Prospectus. There are also a number of differences between Westpac Capital Notes 2 and Westpac Capital Notes 9 outlined in Section 3.4 of the Replacement Prospectus which investors should be aware of before deciding to participate in the Reinvestment Offer.

You cannot withdraw your Application once it has been lodged, except as permitted under the Corporations Act.

Footnotes

  1. Morgans will receive fees for its role.
  2. Westpac may issue more or less than $1.5 billion of Notes.
  3. Subject to APRA approval. Notes are perpetual and do not have a fixed maturity date. If Notes are not Converted, Redeemed or Written-Off, they could remain on issue indefinitely and the issue price may not be repaid.
  4. Conversion is subject to Scheduled Conversion Conditions as outlined in the Prospectus.
  5. Distributions are non-cumulative, paid at the discretion of Westpac and subject to Distribution Payment Conditions. Westpac expects, but does not guarantee, that Distributions will be fully franked. The value and availability of franking credits to a Holder will depend on that Holder’s particular circumstances and the tax rules that apply at the time of each Distribution.
  6. Margin has been determined under the bookbuild and will not change after this determination was made.
  7. Based on 3 Month Bank Bill Rate of 1.80%
  8. Such an event (including where Westpac encounters significant financial difficulty) may result in Exchange or Write-off of Notes; full detail is contained in the Replacement Prospectus and Morgans Offer Summary.
  9. Application will be made to list Notes on ASX.

More information

Investors should read the Replacement Prospectus in full to understand the features and risks of Westpac Capital Notes 9. Please contact your Morgans adviser to apply under the Offer. If you have any questions about the Offer, please contact your Morgans adviser, call 134 226 or find your nearest office.

Download Prospectus

Westpac Capital Notes 9 are being offered only in Australia and the Replacement Prospectus will only constitute an offer to a person receiving it in Australia. Not for distribution, directly or indirectly, in the United States or to, or for the account or benefit of, US Persons, except in accordance with an available exemption from the registration requirements of the US Securities Act. The distribution of the Replacement Prospectus (including an electronic copy) in jurisdictions outside Australia may be restricted by law. I further agree that I am a Qualified Investor or Retail investor receiving personal advice.

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