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ANZ Capital Notes 2

Fund Category Fixed Interest
Minimum Initial Investment $5,000
Expected Close Date 18/02/14

Opportunity to bid - ANZ Capital Notes 2 

ANZ today announced that it intends to issue ANZ Capital Notes 2 to raise A$1 billion with the ability to increase or decrease the size of the offer.

Expected margin for ANZ Capital Notes 2 is between 3.25% and 3.40% per annum above the bank bill swap rate.

2020 DIRECTINVEST is pleased to advise we are able to bid on behalf of our clients. Investors can participate in this offer by providing your firm bid no later than Tuesday 18 February 2014. Please note demand has been very strong and the bookbuild may close as early as Friday 14 February.


This is only a summary, please refer to Prospectus for full details.


Australia and New Zealand Banking Group Limited (ANZ)

Offer type

Fully paid, convertible, redeemable and transferable, non-cumulative, perpetual, unsecured, subordinated and listed.

The Note Terms are complex and derive from the detailed capital requirements which APRA applies to these instruments. ANZ's ability to pay Distributions or to optionally Exchange the Notes is subject to a number of restrictions, including APRA either not objecting to the Distributions or giving prior written approval to the Exchange.

Indicative margins

Distributions are cash payments on the Notes which are scheduled to be paid half-yearly until all Notes are Converted or Redeemed. he Distribution Rate is calculated in accordance with the following formula:

Distribution Rate = (Bank Bill Rate + Margin) x (1 - Tax Rate)


  • Margin is the margin determined under the Bookbuild (expected to be in the range of 3.25% to 3.40%); and
  • Tax Rateis the Australian corporate tax rate applicable to the franking account of ANZ as at the relevant Distribution Payment Date.

Distributions paid on the Notes are expected to be fully or substantially franked. The effect of the Distributions being franked is to reduce the cash amount received by Holders on each Distribution Payment Date by an amount equal to the relevant level of franking. If a Distribution is not fully franked, ANZ will pay an additional amount in cash to compensate the Holder for the unfranked component.

Interest payments

Half yearly payments, generally 24 March and 24 September. The first Distribution is expected to be paid on 24 September.

Use of proceeds

The Offer is part of ANZ's ongoing capital management strategy. ANZ will use the proceeds to refinance CPS1 and for general corporate purposes. APRA has confirmed that the Notes will constitute Additional Tier 1 Capital for the purposes of ANZ's regulatory capital requirements.

Offer price

$100 per note


In a winding-up of ANZ, Notes rank ahead of Ordinary Shares, equally among themselves, equally with Equal Ranking Instruments (including CPS1, CPS2, CPS3, the preference shares comprised in the 2004 Trust Securities and ANZ Capital Notes) and behind all Senior Creditors of ANZ, including depositors, as shown in Table 2. However, the ranking of Holders in a winding-up will be adversely affected if a Trigger Event occurs. If, following a Trigger Event, Notes are Converted into Ordinary Shares, Holders will have a claim as an Ordinary Shareholder. If, following a Trigger Event, Notes are Written Off, all rights in relation to those Notes will be terminated, and Holders will not have their capital repaid.


Expected to trade under ASX code" ANZPE"

Mandatory Conversion Date

24 March 2024 provided that all of the Mandatory Conversion Conditions are satisfied


Key risks

There are risks associated with investing in Notes, and in ANZ such as:

  • ANZ Capital Notes 2 are not deposit liabilities or protected accounts
  • Financial market conditions and liquidity
  • Distributions may not be paid
  • Changes in distribution rate
  • Mandatory Conversion may not occur on the Mandatory Conversion Date
  • Holders have no right to request early Exchange
  • Mandatory Conversion or Write Off following a Trigger Event
  • Ranking in a wind-up of ANZ
  • ANZ may issue further securities
  • Fluctuation in Ordinary Share price
  • ANZ's financial performance and position

The key risks are detailed in Section 6 of the Prospectus and you should read that section in full before deciding to invest.



If you wished to participate in ANZ Capital Notes 2:

  1. Please read the Offer document
  2. Call 02 8273 2020 with your firm bid;
  3. Apply for a Mason Stevens Self Directed Account

ANZ Capital Notes 2 must be purchased through a Mason Stevens Self Directed Account.  Full details will be provided at the time of your bid.  



Mason Stevens Limited

Custodian and Sub-Custodian

Mason Stevens (Custodian) and HSBC (Sub-Custodian)

Administration fee

0.275% p.a. on balances up to $1,000,000.

Custody fee

0.055% p.a. on the portion of the balance above $1,000,000. Calculated daily and charged monthly in arrears.

Account keeping fee

$165 p.a. charged monthly in arrears (or on termination).

Transaction costs

There are no transaction costs for on the Offer however transaction costs may apply when buying and selling other assets in the Portfolio Account.


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Mason Stevens will receive a placement fee of 1%. 2020 DIRECTINVEST is part of the Mason Stevens group of companies.

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