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Herbert Smith Freehills has advised the Joint Lead Managers of Macquarie Group Limited’s (MGL) offer of Macquarie Group Capital Notes 3 (MCN3). MCN3 are fully paid, unsecured, subordinated, non-cumulative, mandatorily convertible notes issued by MGL, and are being offered at an issue price of A$100 per MCN3.

The offer is intended to raise A$600 million, with the ability to raise more or less.

MCN3 will qualify as Eligible Capital for Australian Prudential Regulation Authority (APRA) purposes. The proceeds received by MGL under the offer will be used for general corporate funding and capital management purposes.

Herbert Smith Freehills acted for the ten 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, Evans and Partners Pty Limited, J.P. Morgan Australia Limited, Morgans Financial Limited, National Australia Bank Limited, Shaw and Partners Limited and Westpac Institutional Bank.

The Herbert Smith Freehills team was led by partner Philippa Stone, supported by solicitors Michael Burrell and Elizabeth Cameron.

Philippa Stone said, “We are delighted to have acted for the joint lead manager syndicate on another successful Macquarie Capital Notes transaction. This transaction follows our recent roles acting for the joint lead managers on a number of significant bank hybrids, including ANZ Capital Notes 5 and Westpac Capital Notes 5.”

MGL 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:

  • Commonwealth Bank of Australia on its A$1.365 billion offer of PERLS X;
  • The joint lead managers on Westpac Banking Group’s A$1.45 billion offer of Westpac Capital Notes 5 and Westpac CPs reinvestment offer; and
  • The joint lead managers on ANZ’s A$1 billion offer of ANZ Capital Notes 5 and CPS3 buy-back facility.