SYDNEY Feb 20 Commonwealth Bank of Australia
, the country's biggest mortgage lender, said on Monday
it would raise around A$750 million ($574 million) in hybrid
securities to refinance a similar issue and fund the group's
The issue, to be listed under the name of PERLS IX on the
Australian Stock Exchange, consists of perpetual notes with a
mandatory exchange date of March 31, 2024, according to the
The borrower can also call the notes in March 2022.
Price guidance is 390 basis points to 410 basis points over
the bank bill swap rate, according to the prospectus.
An investor looking at the issue said he expected the offer
to be increased to around A$1 billion. He asked not to be named
because he is not allowed to speak to the media.
The final margin will be set on Feb. 28 following a
bookbuild, with issuance on March 31. Trading on the ASX will
start on April 5.
Financial regulators require banks to hold certain amounts
of these securities to ensure they have sufficient capital to
avoid the need for a taxpayer-funded bailout in the event of a
financial crisis, as happened in many countries in 2008/09.
Banks issue subordinated debt and hybrids, a mix of debt and
equity, because they are cheaper to issue than shares.
The CBA issue follows plans for an A$800 million debt sale
by National Australia Bank.
CBA and Morgan Stanley are joint arrangers and joint lead
managers on the offer. Other joint lead managers include Evans
and Partners, JPMorgan, Morgans Financial, National Australia
Bank and Westpac Institutional Bank.
($1 = 1.3050 Australian dollars)
(Reporting by Cecile Lefort; Editing by Richard Pullin)