Commonwealth Bank of Australia will propose as much as 3% above the swaps rate to purchasers of its new hybrid securities.
CBA was energizing its bankers and brokers for the raising on Monday night, with the deal scheduled to launch on Tuesday morning and target wholesale and sophisticated investors.
The new protections, expected to be named CommBank PERLS XV Capital Notes, would pay 2.8 percent to 3 percent above the market rate, which is the bank bill swap reference rate, sources said.
CBA and its bookrunners would run a bookbuild to decide the final margin in the coming week.
Would it be a good idea for it get it at the tight finish of the range, 2.8 percent, it would recommend investor appetite for hybrids has barely weakened since Australia’s greatest bank last went cap in hand to punters in March, notwithstanding significant changes in interest rate markets and economic circumstances.
The three-month BBSW was 2.93 percent on Monday.
Investors expect that CBA should focus essentially a $750 million raising, and leave a lot of room for oversubscriptions. A major part of the raising will be turning over holders of CBA’s current PERLS VII capital notes, with those notes because of mature in December. Amusingly, they likewise paid 2.8 percent above swaps.
CBA hailed it was thinking about a new hybrid deal last week, in a bid to give retail investors a lot of opportunity to line up their broker and possibly partake in the raising.
The bank appointed its own team, ANZ Securities, Bell Potter, Morgans Financial, NAB, Ord Minnett, Shaw and Partners and UBS as lead managers.
CBA last went to retail investors with a hybrid in March, when it got $1.75 billion at a 2.75 percent margin above swaps.
