CBA collects $1.45bn for PERLS VIII hybrid note offering
The Australian March 31, 2016 12:00am
Chris Kohler
Commonwealth Bank has raised $1.45 billion from its latest PERLS VIII hybrid note offering.
This is slightly higher than the $1.25bn the lender initially set out to raise from the sale of the hybrid securities.
A book-build that closed last month had priced the capital raising at a margin of 5.2 per cent over the official benchmark rate, raising $910 million from brokers and institutional investors.
The pricing is at the bottom end of the indicative range of 5.2-5.35 per cent per annum and equates to an initial yield of about 7.5 per cent, based on yesterday’s bank bill swap rate.
While 5.2 per cent is at the cheaper end for CBA, the range was a record high for an issuance of new top-tier Basel III-compliant hybrids.
CBA said demand for the latest hybrid, dubbed PERLS VIII, was strong.
It said it had received “significantly more” applications from new investors than the $650m cap that had been put in place to ensure a solid result.
The new hybrids have a face value of $100 and will trade on the Australian Securities Exchange from next week, paying quarterly, fully franked distributions from June.