The subordinated notes qualify as Tier 2 capital under APRA’s Basel III capital adequacy framework and will strengthen Westpac’s total regulatory capital position.
Under the terms of the offer, the subordinated notes will be issued in denominations of $100,000 with a minimum transfer amount of $500,000.
They will have a cumulative, floating interest rate which will be paid quarterly in arrear.
Interest will not be paid, however, if the bank is insolvent or will become insolvent as the result of the payment.
The offer has a 10-year maturity and an early redemption option in March 2019, but will be subject to prior approval from APRA for certain tax and regulatory reasons.
The notes can also be converted into Westpac shares if APRA determines Westpac is non-viable.
