National Australia Bank next cab off the hybrid rank
Australian Financial Review May 31 2016 12:15 AM
Sarah Thompson, Anthony Macdonald, Joyce Moullakis
Investors will get to sink their teeth into another big bank hybrid issue this week.
As revealed by Street Talk on Monday, National Australia Bank is preparing to kick off a $750 million-plus hybrid issue as early as Tuesday.
Sources said the tier-one capital notes would have a six-year call date and list on the ASX in July. The bank has the ability to raise more than $750 million, depending on demand.
A NAB spokeswoman declined to comment
NAB's hybrid issue follows hot on the heels of a raising by Westpac Banking Corp.
Last week, Westpac increased its Capital Notes 4 issuance to $1.45 billion from $750 million, setting a margin of 4.9 per cent over the bank bill swap rate. The notes had an initial call date of 5.5 years.
Investors looking for places to park their money in a period of record low interest rates will have to compare the duration of the bank hybrids and the yield on offer.
But given the level of demand Westpac's notes attracted, which included some investors being scale back, if NAB prices attractively the transaction will likely be well supported.
This column foreshadowed the Westpac hybrid earlier this month.
In February, Commonwealth Bank of Australia got investors in the right frame of mind when it launched its PERLS VIII notes.
The new CBA issue helped to ease investor nerves after many were up in arms after the bank's mammoth $3 billion PERLS VII security, which failed to trade near face value.
The offers come as institutional and retail investors seek high-yieldig investments at a time when official interests rates are at record lows.
Elsewhere in banking, Allan Moss-backed ChimpChange has provided terms for its slated float, which will deliver the start-up an indicative enterprise value of $34.7 million.
Street Talk revealed the start-up digital bank planned to issue 18.75 million shares at 80¢ apiece to raise $15 million. There will be 63.48 million shares and 14.27 million options on issue following completion of the offer.
The indicative market capitalisation would come in at $50.8 million, undiluted, at the offer's completion or $62.2 million on a fully diluted basis.
ChimpChange provides a way to transfer money instantly between accounts using mobile phone numbers and emails as identifiers and the MasterCard network. Moelis and CCZ are lead managers.