ANZ replacement for CPS3 likely

27 July 2017

ANZ has announced it is considering an on-market buy-back for its outstanding CPS 3 securities (ASX code: ANZPC). ANZ said any such offer would be in conjunction with an issue of a new series of hybrid which would include a re-investment offer for CPS 3 holders.

ANZ has done this before. As part of the issue of ANZ Capital Notes 2 (ASX code: ANZPE) in February 2014, ANZ offered holders of ANZ CPS (ASX code: ANZPB) the right to re-invest their face value amounts into the new securities. Holders who did not accept this offer had the Capital Notes 2 securities bought back at their $100 face value in June 2014.

In this case, the offer to repurchase the CPS 3 securities will made via a stockbroking firm which would stand in the (ASX) market and purchase all and any CPS 3 securities at face value. ANZ said as a result of this, it “will not formally exercise its right to redeem the CPS3 on 1 September 2017.” That is, any holder at that point would be likely to hold the CPS 3 until the mandatory conversion date.

ANZ CPS were issued in September 2011 with an optional exchange date on 1 September 2017 and a mandatory conversion date in September 2019. At this stage there has been no formal announcement by ANZ but by making announcing this announcement it would appear to be just a formality.