NAB’s newest hybrid issue, Capital Notes 2 (ASX code: NABPD), began trading on the ASX today. With a first call date of 7 July 2022 and an issue margin of 4.95%, trading in the hybrids began on a deferred delivery basis. Normal trading is expected to begin on 12 July. The first trade was at $100.50 and the hybrid closed the day at $100.35, a modest gain from the $100 issue price.
NAB’s new issue was announced only a few days after Westpac’s Capital Notes 4 offer was made public. Between then and now, financial markets around the world have experienced some severe gyrations in the wake of the Brexit vote. NAB and Westpac applicants may have had a few sleepless nights over the last few weeks but the first few days of trading in Westpac’s capital Notes 4 (ASX code: WBCPG) will have eased any anxiety Westpac holders may have been feeling and given some comfort to NAB applicants. Westpac’s notes started trading at a modest premium and have stayed above face value in trading to date.
The NAB issue raised approximately $1.5 billion and the first distribution payment date is set for 7 October 2016. The chart below shows how trading margins stood at the end of NAB’s first day’s trading. For the technically-minded, the issue date volume-weighted average NAB share price, the price used to determine the maximum conversion ratios and the satisfaction of mandatory exchange conditions (in the event of the hybrids being converted to shares) has been announced as $25.27.
