Macquarie to issue hybrid shares
(16 May 2013 – Australia) Macquarie Group outlined its plans on Tuesday to issue hybrid shares aiming to raise up to A$400 million in fresh funds to boost its bottom line as part of the bank’s strategy to include a diverse source of funding.
Hybrid shares pay a set interest rate, which usually tracks the price of debt and after a set period of time convert into ordinary shares.
They are attractive to retail investors since they have bond-like features, paying a predictable yield.
The investment bank will issue the Macquarie Capital Notes, which are fully paid, subordinated and unsecured instruments. The notes will be listed on the ASX and convert to ordinary Macquarie shares in June 2021.
The notes will be issued with a face value of A$100 each and provide investors with a semi-annual distribution rate calculated as the 180-day Bank Bill Swap Rate plus a fixed margin.
The margin is expected to be in the range of 4.0 percent to 4.2 percent to be determined under the book build.
'The Macquarie Note Offer is consistent with Macquarie's strategy to manage its capital mix and maintain a diverse source of funding,' Macquarie chief financial officer, Patrick Upfold, said.
"Macquarie has a strong balance sheet with well diversified funding sources and minimal reliance on short term wholesale funding markets,' he said.
The notes will be sold to both institutional and retail investors and Macquarie has left the door open to raise more under the offer.
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