Herbert Smith Freehills Advises Joint Lead Managers on Macquarie Bank’s A$641 million Capital Notes 2 Issue

Herbert Smith Freehills is proud to have advised the Joint Lead Managers of Macquarie Bank Limited’s (MBL) offer of Macquarie Bank Capital Notes 2 (BCN2). 

BCN2, which will qualify as Eligible Capital for Australian Prudential Regulation Authority purposes, are fully paid, unsecured, subordinated, non-cumulative, convertible, perpetual notes issued by MBL. They were offered at an issue price of A$100 per BCN2.

The offer was originally intended to raise A$400 million (with the ability to raise more or less) but was increased to A$500 million following strong support from brokers and institutional investors in the broker firm offer. This was then further increased to A$641 million post the securityholder offer. The proceeds received by MBL under the offer will be used for general corporate funding and capital management purposes.

Herbert Smith Freehills acted for the nine Joint Lead Managers, being Macquarie Capital (Australia) Limited (who was also the sole arranger), ANZ Securities Limited, Citigroup Global Markets Australia Pty Ltd, Commonwealth Bank of Australia, E&P Corporate Advisory Pty Limited, Ord Minnett Limited, Morgans Financial Limited, National Australia Bank Limited, and Westpac Institutional Bank.

The Herbert Smith Freehills team was led by partner Philippa Stone, supported by Special Counsel Rob Finlay and solicitors Michael Burrell and Shananne Joyce.

Philippa Stone said, “We are delighted to have acted for the joint lead manager syndicate on another successful Macquarie Bank Notes transaction. This transaction follows our recent role acting for the joint lead managers on the offer of Westpac Capital Notes 6.”

MBL was advised by King & Wood Mallesons.

This deal is another example of Herbert Smith Freehills’ market-leading work in bank hybrids. Other recent examples include, advising:

• The joint lead managers on MGL’s A$750 million offer of Macquarie Group Capital Notes 4;
• The joint lead managers on Westpac Banking Group’s A$1.42 billion offer of Westpac Capital Notes 6;
• The joint lead managers on MGL’s A$1 billion offer of Macquarie Group Capital Notes 3; and
• Commonwealth Bank of Australia on its A$1.365 billion offer of PERLS X.