HSF advises joint lead manager syndicate on $641m capital notes issue

The notes “will qualify as eligible capital for APRA purposes,” the firm says

HSF advises joint lead manager syndicate on $641m capital notes issue

Herbert Smith Freehills (HSF) has advised a joint lead manager syndicate on a $641m capital notes issue.

The firm assisted the joint lead managers of Macquarie Bank Limited (MBL) in its offer of Macquarie Bank Capital Notes 2 (BCN2). The joint lead managers were Macquarie Capital (Australia) Limited, ANZ Securities Limited, Citigroup Global Markets Australia Pty Ltd, Commonwealth Bank of Australia, E&P Corporate Advisory Pty Limited, Ord Minnett Limited, Morgans Financial Limited, National Australia Bank Limited and Westpac Institutional Bank.

Macquarie Capital (Australia) Limited also acted as the sole arranger.

HSF said the BCN2 “will qualify as eligible capital for APRA purposes.” The notes, which were offered at an issue price of $100 per BCN2, are fully paid, unsecured, subordinated, non-cumulative, convertible and perpetual.

The initial intent was to raise $400m in the process, but broker support and interest from institutional investors in the broker firm offer pushed the raising to $500m. Following the securityholder offer, the raising amount soared past the $600m mark.

MBL will be applying the profits from the offer to general corporate funding and capital management. King & Wood Mallesons advised the bank on the deal.

Partner Philippa Stone led the HSF team on the transaction, with support from special counsel Rob Finlay and solicitors Michael Burrell and Shananne Joyce.

 “We are delighted to have acted for the joint lead manager syndicate on another successful Macquarie Bank Notes transaction,” Stone said.

In March 2019, Stone had headed a team that assisted the joint lead managers of Macquarie Group Limited on a $750m capital notes issue featuring a Macquarie Group Capital Notes 4 offer—a recent example of the firm’s successful activity in bank hybrid transactions.

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