November 8

Westpac tipped to seek $1.5b for new hybrid deal

Westpac’s latest hybrid transaction, for which it mandated nine joint lead managers on Monday, is projected to exceed $1 billion.

According to Street Talk, the big four bank is pushing for a $1.5 billion transaction. Due to the Melbourne Cup – and Westpac’s annual results – capturing investors’ attention this week, it is expected to launch next week.

Flagging the mooted deal on Monday morning, Westpac said it had hired nine joint lead managers – Westpac Institutional Bank, ANZ Securities, CBA, Morgan Stanley, Morgans, NAB, Ord Minnett, Shaw and Partners and UBS – as well as three co-managers across Bell Potter, LGT Crestone Wealth Management and Wilsons.

The issue is expected to include a reinvestment offer for eligible Westpac Capital Notes 6 holders. It was announced alongside a 26 per cent jump in Westpac’s full-year profits to $7.2 billion, helped by strong growth in its institutional banking business. The bank also said it would run a $1.5 billion buyback and a 72¢ final dividend.

The new hybrid contract comes nearly 1½ years after Westpac’s last one was printed.

The Westpac Capital Notes 9 raised $1.51 billion in July 2022 – double its initial $750 million ask – and saw the bank pay a 3.4 per cent margin over the three-month bank bill swap rate (BBSW). Despite the deal doubling in size, final pricing came at the tighter end of 3.4 per cent to 3.6 per cent initial pricing guidance.


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