Ashurst has advised the Commonwealth Bank of Australia ('CBA') on an offer to raise A$750 million through a new Tier 1 hybrid, Commbank PERLS IX Capital Notes ('Offer').

PERLS IX are subordinated, unsecured notes, scheduled to pay quarterly, floating rate distributions which are expected to be fully franked. PERLS IX have a call date in March 2022 and will mandatorily exchange into CBA ordinary shares in March 2024. PERLS IX will qualify as Tier 1 capital of CBA and have an initial face value of A$100 million. The offer is expected to raise A$750 million, with the ability to raise more or less.

The Offer will comprise of a Broker Firm Offer made to retail investors who are clients of a Syndicate Broker and certain institutional investors, and a Priority Securityholder Offer, an offer of CBA PERLS IX Capital Notes to eligible holders of Colonial Group Subordinated Notes, issued by Colonial Holding Company Limited (a subsidiary of CBA). This includes an offer to sell all or some of their Colonial Group Subordinated Notes to CBA for A$100 per Colonial Group Subordinated Note on the Purchase Date (31 March 2017) and to automatically reinvest the sale proceeds in PERLS IX.

The issue of CommBank PERLS IX Capital Notes under the Offer is expected to occur on 31 March 2017, with deferred settlement trading and normal settlement trading to occur on 3 April 2017 and 5 April 2017 respectively.

The net proceeds of the Offer will be used to fund CBA's business. The Offer will raise Tier 1 Capital to satisfy CBA's regulatory capital requirements and maintain the diversity of CBA's sources and types of funding.

CBA and Morgan Stanley Australia Securities Limited are the Arrangers and Joint Lead Managers of the Offer. Evans and Partners Pty Limited, J.P. Morgan Australia Limited, Morgans Financial Limited, National Australia Bank Limited and Westpac Institutional Bank are also Joint Lead Managers to the Offer.

The Ashurst team was led by partner Sarah Dulhunty (Corporate). Sarah was assisted by senior associate Andrew Kim and lawyer, Kristen Wong (Corporate).