Crown’s first series of Subordinated Notes (ASX code: CWNHA) were issued in September 2012. They pay a floating rate of interest equivalent to 3 month BBSW + 500bps, have a first call date on Friday, 14 September 2018 and their final maturity date is on 14 September 2072.
Crown has just announced it will redeem all outstanding series 1 notes on the first call date. Holders will receive the final interest payment of $1.78 in addition to the $100.00 face value.
The price of the notes increased by 0.8% on the day of the announcement to close at 101.10%. At this price, the internal rate of return (IRR) before transaction costs is just under 3.90%.
The announcement follows a similar announcement from Westpac regarding the redemption of its Westpac Subordinated Notes II (ASX code: WBCHB). Suncorp and AMP are expected to take similar steps in the next few months.
