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Additional Tier 1 Regulatory Capital Note issue

Commonwealth Bank of Australia (CBA) has announced it is seeking to raise $1.25 billion(1) through the issue of CBA PERLS XII (CBAPI).

CBA PERLS XII may be suitable for investors looking for regular fully franked income by way of floating rate distributions from one of Australia’s leading providers of financial services and offers investors the opportunity to further diversify their income portfolio.

Key features of the Offer

  • Ability to secure a Broker Firm allocation via Morgans in CBA PERLS XII(2)
  • CBA PERLS XII have a face value of $100 and are redeemable by the issuer on 20 April 2026(3)
  • If not redeemed before, CBA PERLS XII convert into CBA Ordinary shares on 20 April 2028(4)
  • Quarterly gross distributions(5) equal to the 3 month Bank Bill Rate plus a margin of 3.00% (6) - i.e. approximately 3.85% p.a.(7)
  • Distributions are discretionary, non-cumulative but must be paid ahead of ordinary share dividends, and if not paid, dividend and capital restrictions apply to Ordinary Shares.
  • CBA PERLS XII are Basel III compliant regulatory instruments and contain both capital and non-viability trigger conditions which may impact their value in certain circumstances(8)
  • ASX listed liquidity(9)

Issuer: Commonwealth Bank of Australia (CBA)

Transaction: Additional Tier 1 Regulatory Capital Note issue

Morgans Role: Joint Lead Manager

Offer Size: $1.25 billion

Offer Open: 17 October 2019

Morgans Closing Date: 8 November 2019

Investors should note that investments in CBA PERLS XII are an investment in CBA and may be affected by the ongoing performance, financial position and solvency of CBA. PERLS XII are not deposit liabilities or protected accounts of CBA under the Banking Act. They are not guaranteed or insured by any Australian government, government agency or compensation scheme. No member of the CBA Group guarantees PERLS XII and no member of the CBA Group, other than CBA, has any liability for PERLS XII.

There are a number of risks associated with an investment in CBA PERLS XII, many of which are outside the control of CBA. Before applying for CBA PERLS XII all investors should consider whether CBA PERLS XII are a suitable investment for them including by considering the key risks as outlined in Sections 1.2.2 and 4 of the Prospectus.

1. CBA may issue more or less than this amount.
2. Morgans will receive fees for its role.
3. Subject to APRA approval.
4. Conversion is subject to conversion tests as outlined in the prospectus.
5. Distributions are non-cumulative, paid at the discretion of CBA and subject to distribution payment conditions.
6. Margin is set via the bookbuild and may set outside this range.
7. Based on 3 month bank bill rate of 0.85%
8. Such conditions may in certain circumstances impact the security's value; full detail is contained in the Prospectus and Morgans Offer Summary.
9. Application will be made to list CBA PERLS XII on ASX. 

More information

If you have any questions about the offer, please contact your Morgans adviser, call 134 226 or find your nearest office here.

Download Prospectus

CBA PERLS XII are being offered only in Australia and the Prospectus will only constitute an offer to a person receiving it in Australia. Not for distribution, directly or indirectly, in the United States or to, or for the account or benefit of, US Persons, except in accordance with an available exemption from the registration requirements of the US Securities Act. The distribution of the Prospectus (including an electronic copy) in jurisdictions outside Australia may be restricted by law.

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