This offer closed on:
11 December 2020

National Australia Bank

Capital Notes 5

Morgans is a Joint Lead Manager to the Offer(1)

National Australia Bank Limited (NAB) has announced it is seeking to raise $2 billion(2) through the issue of NAB Capital Notes 5 (NABPH).

NAB Capital Notes 5 may be suitable for investors looking for regular fully franked(3) income by way of floating rate distributions. NAB Capital Notes 5 may offer investors the opportunity to further diversify their income portfolio.

The Offer includes a Reinvestment Offer to all eligible NAB Convertible Preference Shares II (CPS II) Holders (ASX: NABPB) who held NAB CPS II on the record date Wednesday, 11 November 2020.

NAB will redeem all NAB CPS II on 17 December 2020 for Holders who do not elect to participate in the Reinvestment Offer. Holders will receive the redemption proceeds ($100 per Note) for the NAB CPS II held on that date.

NAB Capital Notes 5 are complex and may not be suitable for all investors as they involve different risks from a simple debt or ordinary equity securities. You should ensure that you understand the Terms and risks of investing in NAB Capital Notes 5 and consider whether it is an appropriate investment for your particular circumstances. It is important that you read the Replacement Prospectus in full before deciding to invest in NAB Capital Notes 5.

Key features of the Offer

  • Opportunity to reinvest NAB CPS II redemption proceeds ($100 per Note) into NAB Capital Notes 5 ($100 per Note) and maintain an exposure to NAB beyond the expected redemption of NAB CPS II on 17 December 2020 
  • Opportunity to participate in the Broker Firm Offer via Morgans as a Joint Lead Manager to the Offer
  • NAB Capital Notes 5 have a face value of $100 and are redeemable by the issuer on 17 December 2027(4) 
  • If not redeemed before, NAB Capital Notes 5 will convert into ordinary shares on 17 December 2029(5) 
  • Quarterly (fully franked) gross distributions(6) equal to the 3 Month Bank Bill Rate plus a margin of 3.50(7) i.e. approximately 3.52 p.a(8) 
  • Distributions are discretionary, non-cumulative and subject to the Distribution Payment Conditions outlined in the Replacement Prospectus but must be paid ahead of ordinary share dividends, and if not paid, dividend and capital restrictions apply to ordinary shares 
  • NAB Capital Notes 5 constitute as APRA eligible regulatory capital instruments and contain both Capital Trigger and Non-Viability Trigger Events which may impact their value in certain circumstances(9) 
  • Expected to be quoted on the ASX under the code NABPH(10)

Issuer: National Australia Bank Limited (NAB)

Transaction: Capital Notes Offer

Morgans Role: Joint Lead Manager

Offer Size: $2 billion

Offer Opening Date: 24 November 2020

Morgans Broker Firm new applications closing date: 11 December 2020

Morgans Reinvestment Offer applications closing date: 4 December 2020

Investments in the NAB Capital Notes 5 are an investment in NAB and will be affected by the ongoing performance, financial position and solvency of NAB. NAB Capital Notes 5 are not deposit liabilities of NAB, are not Protected Accounts or any other accounts with NAB and are not insured or guaranteed by any government, government agency or compensation scheme of the Commonwealth of Australia or any other jurisdiction, by any member of the Group or by any other person.

NAB Capital Notes 5 are riskier than bank deposits and may not be suitable for some investors. Their complexity may make them difficult to understand and the risks associated with the Notes could result in the loss of all of your investment. Before applying for NAB Capital Notes 5 all investors should consider whether NAB Capital Notes 5 are a suitable investment for them including by considering the key risks as outlined in sections 1.3 and 7 of the Replacement Prospectus. There are also a number of differences between NAB CPS II and NAB Capital Notes 5 outlined in section 3.2 of the Replacement Prospectus which investors should be aware of before deciding to participate in the Reinvestment Offer.

Please note an Application to acquire NAB Capital Notes 5 is irrevocable and may not be varied or withdrawn except as allowed by law.


  1. Morgans will receive fees for its role.
  2. NAB may issue more or less than $2 billion of NAB Capital Notes 5.
  3. NAB expects, but does not guarantee, that Distributions will be fully franked. The value and availability of franking credits to investors will depend on the investors particular circumstances and the tax rules that apply at the time of each Distribution.
  4. Subject to APRA approval. NAB Capital Notes 5 are perpetual and do not have a fixed maturity date. If NAB Capital Notes 5 are not Converted, Redeemed or Written-Off, they could remain on issue indefinitely and the Issue Price may not be repaid. 
  5. Conversion is subject to conversion conditions as outlined in the Replacement Prospectus. 
  6. Distributions are non-cumulative, paid at the discretion of NAB and subject to Distribution Payment Conditions. 
  7. Margin was set via the bookbuild on 20 November 2020.
  8. Based on 3 Month Bank Bill Rate of 0.02%.
  9. A Trigger Event, which may be triggered where NAB encounters severe financial difficulty, may result in Conversion or Write-off of NAB Capital Notes 5; full detail is contained in the Replacement Prospectus and Morgans Offer Summary. 
  10. Application will be made to list NAB Capital Notes 5 on ASX.

More information

Investors should read the Replacement Prospectus in full to understand the features and risks of NAB Capital Notes 5. Please contact your Morgans adviser to apply under the Offer. If you have any questions about the Offer, please contact your Morgans adviser, call 134 226 or find your nearest office.

Download Prospectus

NAB Capital Notes 5 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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