When ANZ announced the issue of its latest hybrid security in August of last year, among the various offers and options it provided to its existing securities holders, one was to buy back Converting Preference Securities III (CPS3) first issued in 2011. The offer to buy the securities at face value did not raise any eyebrows; after all, the first optional exchange date, what is generically referred to as a call date, was only months away in March 2018.
However, there was some doubt as to what ANZ had planned for the CPS3 which remained on issue. At the time ANZ itself said, “As at the date of this release, ANZ has not made any decision how it will deal with the CPS3 which are not bought-back under the Buy-Back Facility.”
Well, now there is no longer any uncertainty. ANZ announced it will pay $100 for the remaining CPS3 still on issue on 1 March 2018, plus $1.4753 franked which represents the accrued distribution up to that date.
One curious aspect of the deal is the repurchase will take place via a $99.9999 per CPS3 capital return and then a redemption of each CPS3 for $0.0001. The capital return keeps the securities “alive” in a sense whilst effectively repaying almost all the face value back to holders. The securities will be then redeemed for the balance.
The last day of trading on the ASX will be 12 February 2018.