As reported in YieldReport last week, Macquarie Group is looking to raise at least $400m in a new issue of hybrid Capital Notes 2. The Notes will replace an existing $400m issue of hybrid Preferred Membership Interests maturing in December 2015.
The new issue will be fully paid, subordinated, non-cumulative, unsecured, mandatorily convertible, perpetual capital notes automatically convertible at the point of non-viability of the Macquarie Group. As such, they will contribute additional Tier 1 capital to the Group’s capital position.
The Notes are being marketed at 515bps to 535bps over the bank bill swap rate with the final margin to be determined in an institutional bookbuild later this week. The 90 day bank bill swap rate is reset each quarter but presently sits at around 2.25% meaning the yield for the first 90 days will be around 7.40% to 7.60% (gross). The yield quoted is a gross yield that includes franking which at present sits at 40%.
There is a mandatory conversion date into ordinary shares to the value of $101 per $100 face value of security with an option conversion on either: 17 March 2021; 17 September 2021; 17 March 2022.