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ANZ Bank New Zealand Limited (“ANZ”) has announced the launch of Capital Notes (“Notes”).

A brief summary of the offer is set out below.

Summary Details of Instrument

Issuer: ANZ is the issuer of the Notes

ANZBGL is the issuer of ANZBGL Shares if Conversion occurs

Type of Instrument: The Notes are mandatory convertible, non-cumulative, perpetual, subordinated debt securities

Depending on the circumstances, the Notes may be repaid, Converted into ANZBGL Shares or Written Off

Perpetual: The Notes have no fixed maturity date and will remain on issue indefinitely if not repaid, Converted or Written-Off

Subordinated: • Rank ahead of ANZ ordinary shares

• Rank equally with ANZ Preference Shares issued in 2013, the Branch AT1 Securities expected to be issued in March 2015 and any future equally ranking securities (including ANZ AT1 securities)

• Rank behind all other liabilities of ANZ (secured creditors, depositors, ANZ Perpetual Notes issued in April 2008)

Interest Payments:

• Swap Rate + Margin until 25 May 2020, 3 month BKBM + Margin thereafter

• Short first coupon to 25 May 2015 and quarterly thereafter

• Interest payments are at ANZ’s discretion

• Interest payments are subject to no Payment Condition existing

Non-cumulative: Interest payments are non-cumulative (any unpaid interest will never be paid)
Dividend Stopper: If Interest is not paid within 3 Business Days of an Interest Payment Date, ANZ must not pay (except in limited circumstances) any dividends on its ordinary shares or undertake a share buy-back or other capital reduction until interest is next paid on the Notes

Repayment: ANZ may choose to repay some or all of the Notes (subject to RBNZ and APRA approval and other conditions) on:

• the Optional Exchange Date (25 May 2020)

• following a Regulatory Event or a Tax Event

Conversion: Optional Conversion. ANZ may choose to Convert some or all of the Notes, subject to certain conditions, on:

• the Optional Exchange Date (25 May 2020)

• a Regulatory Event or a Tax Event

Mandatory Conversion. ANZ must Convert all of the Notes, subject to certain conditions, on:

• the Mandatory Conversion Date (25 May 2022)

• a Change of Control Event. Trigger Event: ANZ must Convert some or all of the Notes on a Trigger Event. A Trigger Event can be either a Common Equity Trigger Event or a Non-Viability Trigger Event
Common Equity Trigger Event: • ANZ Determines (or the RBNZ notifies)that the ANZ Group Common Equity Tier 1 Capital Ratios is <= 5.125% or;

• ANZBGL determines (or APRA notifies) that the ANZBGL Level 2 Group Common Equity Tier 1 Capital Ratio is <= 5.125%

• ANZ must convert enough Notes to increase the CET1 ratio of ANZ or ANZBGL Level 2 to >5.125%, in consultation with the RBNZ or APRA (as applicable)

Non-Viability Trigger Event:

• RBNZ gives ANZ a direction under the RBNZ Act; or

• ANZ is required to convert or write off Tier 1 instruments by a statutory manager; or

• APRA notifies ANZBGL to convert or write off of Tier 1 instruments because without it ANZBGL would become non-viable; or

• APRA notifies ANZBGL that without a public sector injection of capital (or equivalent) ANZBGL would become non-viable; or

• ANZ must convert enough Notes to satisfy the RBNZ, Statutory Manager or APRA that ANZ or ANZBGL (as applicable) is viable

• ANZ must convert all Notes if APRA notifies ANZBGL it would be non-viable without a public sector injection of capital

Write-Off: Write off if Notes are not Converted into ANZBGL Shares within 5 business days following a Trigger Event

Key Risks:
• Risks associated with the Trigger Events, which may include, on conversion to • ANZBGL shares, investors receiving value significantly less than the principal amount of the Notes or, if no conversion occurs, the Notes being written off

• You have no control or influence over if or when the conversion or repayment may occur, and the Notes may remain on issue indefinitely.

•If any of the Notes are converted, the investment may no longer be suitable for you

• Business risks, such as those associated with a decline in performance and position of the ANZ Group and the ANZBGL Group

• Market related risks, such as the lack of liquidity, price fluctuation, and the risks that the interest rates may become less attractive to you over time.

• The principal risks associated with the Notes are described in Section 2.6 of the Offer Document.

Listed: It is expected that the Notes will be listed on the NZDX

Credit Rating: BBB- by Standard & Poor’s

Ranking: Subordinated and unsecured debt securities of ANZ

Issue Size: Up to NZ$250 million with the ability to accept unlimited oversubscriptions

Indicative Margin Range: Currently indicated at 3.50% - 3.60% which would currently equate to 7.25% - 7.35%

Early Bird Interest:Interest will accrue at 4.50% from the date from when monies are banked until the Issue Date unless subscription money is returned for any reason

Denominations: Minimum of NZ$5,000 and in multiples of NZ$1,000 thereafter

Brokerage: The Issuer will pay 0.75% on total applications to brokers with a Firm Fee of 0.50%

Offer Document and term sheet:

Important Dates
MENZ Firm Bid: 4th March 2015, 4pm
Rate Set Date: 5th March 2015
Opening Date: 6th March 2015
Closing Date: 27th March 2015
Issue Date: 31st March 2015
Expected Date of Listing: 1st April 2015