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ASB Bank Limited has launched a new offer of NZ$ Subordinated Notes (“ASB Notes”).
Key details are as follows.


KEY TERMS

Issuer: ASB Bank Limited

Issue Rating: S&P BBB+

Type of Instrument: ASB Notes are subordinated, unsecured debt securities of ASB that are due to be repaid in full on the Maturity Date. ASB Notes may, depending on the circumstances, be repaid earlier, Exchanged into CBA Ordinary Shares, or if Exchange cannot occur, your rights under the relevant ASB Notes will be terminated (including rights to payments of interest and principal and to receive CBA Ordinary Shares).

Issue Amount: Up to NZ$300m, with the ability to accept oversubscriptions of up to NZ$100m

Issue Price: NZ$1 per ASB Note

Use of proceeds: The Offer raises Tier 2 Capital to satisfy ASB’s and CBA’s regulatory capital requirements and maintain the diversity of ASB’s and CBA’s sources and types of capital funding. On issue, ASB Notes will be classified as debt in the financial statements of ASB.

Maturity Date: 15 June 2024
Early repayment: ASB may Repay ASB Notes on the Call Option Date or on any Scheduled Interest Payment Date after the Call Option Date, and may Repay ASB Notes in certain other circumstances. ASB’s rights to Repay ASB Notes before the Maturity Date are subject to conditions which may not be able to be satisfied at the required time meaning the Repayment would not occur.

Call Option Date: 15 June 2019

Interest Payment Dates: Interest is scheduled to be paid quarterly in arrears on each Interest Payment Date until ASB Notes have been Repaid or Exchanged or if your rights in relation to ASB Notes have been terminated (in the event that Exchange cannot occur).

Interest Rate: The Interest Rate will be:
•until the Call Option Date, the sum of the Margin and the 5 Year Swap Rate (a reference interest rate for an instrument with a term equal to five years) on the Bookbuild Date; and
•on and from the Call Option Date, the sum of the Margin and the 5 Year Swap Rate on the Call Option Date.
The Interest Rate for the period from the Issue Date to the Call Option Date will be set on the Bookbuild Date and announced by ASB via NZX on or before the Opening Date.

Indicative Margin: +[2.05 – 2.25%] The Margin will be announced by ASB on or before the Opening Date. The Margin will not change over the term of ASB Notes.

Exchange or termination of your rights following a non-viability event:
If a Non-Viability Trigger Event occurs, all or some ASB Notes will automatically and immediately be Exchanged for CBA Ordinary Shares. A Non-Viability Trigger Event can occur if ASB or CBA encounter severe financial difficulty, among other circumstances. The meaning of Non-Viability Trigger Event and a summary of how Exchange works is detailed in Section 2.5 of the Investment Statement “What returns will I get?” under the heading “How does Exchange work?”. The meaning of Non-Viability Trigger Event is also set out in Section 6 “Glossary”.

If a Non-Viability Trigger Event occurs, you may receive a number of CBA Ordinary Shares with a value which is less than the Face Value of your ASB Notes due to the application of the Maximum Exchange Number (see Section 5 “Information about CBA Ordinary Shares if Exchange occurs”).
If following a Non-Viability Trigger Event, the Exchange is not effective and CBA is not otherwise able to issue CBA Ordinary Shares within five Business Days, and/or ASB Notes are not validly transferred to ASB Holdings within five Business Days, then your rights under the relevant ASB Notes will be terminated (including rights to payments of interest and principal and to receive CBA Ordinary Shares).


KEY DATES

Book Build opens: Monday 17 March 2014
Book Build closes: Monday 24 March 2014. Bids due by 2pm
Interest Rate Set: Monday 24 March 2014
Offer Open Date: Tuesday, 25 March 2014
Offer Closing Date: Tuesday, 15 April 2014 at 5pm
Issue Date: Thursday, 17 April 2014