This offer closed on:
26 November 2020

Westpac Banking Corporation

Capital Notes 7

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

Westpac Banking Corporation (ASX: WBC) (Westpac) has announced it is seeking to raise $1.4 billion⁽²⁾ through the issue of Westpac Capital Notes 7 (WBCPJ). Westpac Capital Notes 7 are fully paid, non-cumulative, convertible, transferable, redeemable, subordinated, perpetual, unsecured notes.

Westpac Capital Notes 7 may be suitable for investors looking for regular fully franked⁽³⁾ income by way of floating rate distributions. Westpac Capital Notes 7 may offer investors the opportunity to further diversify their income portfolio.

The Offer includes a Reinvestment Offer to all eligible Westpac Capital Notes 3 (ASX: WBCPF) Holders who held Westpac Capital Note 3 on the record date Wednesday, 28 October 2020.

Westpac intends to arrange for all remaining Westpac Capital Note 3 Units to be transferred for $100 per Note on 22 March 2021 (redemption) with the redemption proceeds being paid to Westpac Capital Note 3 Holders who do not elect to reinvest in this Offer and still hold Units on that date (subject to various factors including any required regulatory approvals).

Westpac Capital Notes 7 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 Westpac Capital Notes 7 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 Westpac Capital Notes 7.

Key features of the Offer

• Opportunity to reinvest Westpac Capital Note 3 redemption proceeds ($100 per Note) into Westpac Capital Notes 7 ($100 per Note) and maintain an exposure to Westpac beyond the expected redemption of Westpac Capital Notes 3 on 22 March 2021
• Opportunity to participate in the Broker Firm Offer via Morgans as a Joint Lead Manager to the Offer
• Westpac Capital Notes 7 have a face value of $100 and are redeemable by the issuer on 22 March 2027⁽⁴⁾ 
• If not redeemed before, Westpac Capital Notes 7 will convert into ordinary shares on 22 March 2029⁽⁵⁾ 
• Quarterly (fully franked) gross distributions⁽⁶⁾ equal to the 3 Month Bank Bill Rate plus a margin of 3.40%⁽⁷⁾ i.e. approximately 3.42% 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 
• Westpac Capital Notes 7 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 WBCPJ⁽¹⁰⁾

Issuer: Westpac Banking Corporation (ASX:WBC) (Westpac)

Transaction: Capital Notes Offer

Morgans Role: Joint Lead Manager

Offer Size: $1.4 billion

Offer Opening Date: 13 November 2020

Morgans Broker Firm new applications closing date: 27 November 2020

Morgans Reinvestment Offer applications closing date: 24 November 2020

Investments in the Westpac Capital Notes 7 are an investment in Westpac and will be affected by the ongoing performance, financial position and solvency of Westpac. They are not deposit liabilities or protected accounts of Westpac for the purposes of the Banking Act or Financial Claims Scheme and are not subject to the depositor protection provisions of Australian banking legislation (including the Australian Government guarantee of certain bank deposits). Therefore, Westpac Capital Notes 7 are not guaranteed or insured by the Australian Government, any government agency or compensation scheme of Australia or any other jurisdiction.

Westpac Capital Notes 7 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 Westpac Capital Notes 7 all investors should consider whether Westpac Capital Notes 7 are a suitable investment for them including by considering the key risks as outlined in sections 1.5 and 5 of the Replacement Prospectus. There are also a number of differences between Westpac Capital Notes 3 and Westpac Capital Notes 7 outlined in section 3.4 of the Replacement Prospectus which investors should be aware of before deciding to participate in the Reinvestment Offer. 

Footnotes 

1. Morgans will receive fees for its role.
2. Westpac may issue more or less than $1.4 billion of Westpac Capital Notes 7.
3. Westpac 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. Westpac Capital Notes 7 are perpetual and do not have a fixed maturity date. If Westpac Capital Notes 7 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 Westpac and subject to Distribution Payment Conditions.
7. Margin was set via the bookbuild on 11 November 2020.
8. Based on 3 Month Bank Bill Rate of 0.02%.
9. Such an event (including where Westpac suffers significant losses) may result in Conversion or Write-off of Westpac Capital Notes 7; full detail is contained in the Replacement Prospectus and Morgans Offer Summary.
10. Application will be made to list Westpac Capital Notes 7 on ASX.

More information

Investors should read the Replacement Prospectus in full to understand the features and risks of Westpac Capital Notes 7. 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

Westpac Capital Notes 7 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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