Herbert Smith Freehills has advised the joint lead managers of Australia and New Zealand Banking Group Limited’s (ANZ) offer of new Tier 1 hybrid securities known as ANZ Capital Notes 2 (Notes) and concurrent reinvestment offer and buyback of ANZ’s CPS1 securities (Offer). The Offer will seek to raise A$1 billion, with the ability to raise more or less.

The Notes are perpetual, fully paid, mandatorily convertible and subordinated, offered at an issue price of A$100 and are expected to be quoted on the ASX.

Herbert Smith Freehills acted for the joint lead manager syndicate, comprised of ANZ Securities, Goldman Sachs, J.P. Morgan, Morgans, Morgan Stanley, UBS and Westpac Institutional Bank. Bell Potter, JBWere and Ord Minnett were appointed as co-managers to the Offer.

The Herbert Smith Freehills team was led by global co-head of equity capital markets, Philippa Stone and executive counsel Lauren Magraith, assisted by solicitor Adrian Amer.

“ANZ is the first of the major Australian banks to come to market with a hybrid offering this year and we are very pleased to have acted for the joint lead manager syndicate on this transaction, following our roles on almost all of the major bank hybrids last year, including acting for the syndicate on ANZ’s original offer of ANZ Capital Notes,” said Stone.

King & Wood Mallesons advised ANZ.

Herbert Smith Freehills’ capital markets team has extensive experience acting for both issuers and joint lead managers on hybrid transactions. The team has recently acted for: Commonwealth Bank of Australia on its A$2 billion offer of PERLS VI (and concurrent PERLS IV buy-back and Reinvestment Offer) (the first fully Basel III compliant offering by an Australian bank); Bendigo and Adelaide Bank on its A$269 million issue of Convertible Preference Shares and concurrent Reset Preference Share Reinvestment Offer (the second such fully Basel III compliant offering); the joint lead managers on Macquarie’s A$580 million Capital Notes offer, Westpac’s A$1.38 billion Capital Notes offer and A$1.5 billion Subordinated Notes offer; and NAB’s A$1.51 billion CPS offer (all of which were Basel III compliant offerings). In addition, the team recently acted for: the joint lead managers on ANZ’s A$1.5 billion offer of ANZ Subordinated Notes and A$1 billion offer of ANZ Capital Notes; Colonial on its A$1 billion offer of subordinated notes;  the joint lead managers on IAG’s A$377 million offer of convertible preference shares; and AGL Energy Limited on its A$900 million entitlement offer and A$650 million subordinated notes offer.