Westpac subordinated notes? - Aussie Stock Forums

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  1. #1

    Default Westpac subordinated notes?

    What are these? Are they good value?

  2. #2
    short- to medium-term trader pixel's Avatar
    Join Date
    Feb 2010
    Perth, WA

    Default Re: Westpac subordinated notes?

    depends on what you're after:
    2.75% above 90-day bank bill may appeal to some.
    but if you're in doubt about Westpac's long-term financial future, it could be risky.
    Have you read the exact qualifiers? "unsecured" and "subordinate" may not mean much if you're certain WBC will continue to do well, but if not..
    Artificial Intelligence is no match for Innate Stupidity.

  3. #3

    Default Re: Westpac subordinated notes?

    Here's a summary from The Age about the issue.

    Westpac to raise $500m in debt sale
    Date July 16, 2012

    Eric Johnston
    Financial services editor

    Westpac will push ahead with a listed debt issue, with the lending giant outlining plans to raise about $500 million through a subordinated note issue.

    The securities, to be called Westpac Subordinated Notes, are fully paid, unsecured subordinated debt. However, unlike hybrid shares the notes don't convert to ordinary shares.

    The notes are being offered with an issue price of $100 each, with Westpac reserving the right to raise more funds.

    “Westpac subordinated notes provide an opportunity for investors to diversify their investment portfolio with a simple investment product, paying regular, quarterly interest payments at an attractive yield”, said Westpac's Group Treasurer, Curt Zuber.

    Mr Zuber said the issue will "further strengthen Westpac's total capital position".

    There has been a flurry of listed debt issues this year, with a range of notes offered from more standard hybrid shares to subordinated notes. While there has been strong interest in the securities - particularly those that offer a stable income stream - some companies offering more complicated instruments have been forced to shelve their raisings.

    The Westpac notes will pay a floating rate of interest quarterly in cash. The payments will be calculated as the 90-day bank bill rate plus a fixed margin which is expected to be in the range of 2.75 per cent to 2.95 per cent.

    Based on Friday's bank bill rate, the notes would be priced at 6.29 per cent if the margin at the bottom end of the range is used.

    The notes will have a fixed maturity date of 23 August 2022, but may be redeemed earlier at Westpac's option in August 2017.

    The notes will qualify as Tier-2 capital under Australian Prudential Regulation Authority's rules surrounding capital.

    The offer is expected to open on 23 July and will be made available to both retail and institutional investors.

    The offer comes days after Westpac last week raised US$2 billion ($1.95 billion) in two tranches in US debt markets.

    Read more: http://www.theage.com.au/business/we...#ixzz21UnaUToD

    I found this discussion & related links useful.






  4. #4

    Default Re: Westpac subordinated notes?

    Thanks. It's a little over my head, so I think I'll give it a miss. I'm learning that I should only ever invest in things I feel I can fully understand...

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