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Australia's Westpac to raise A$1.25 bln hybrid to expand capital buffer

Published 05/08/2015, 04:59 pm
Updated 05/08/2015, 05:06 pm
Australia's Westpac to raise A$1.25 bln hybrid to expand capital buffer
PRU
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WBC
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SYDNEY, Aug 5 (Reuters) - Westpac Banking Corp WBC.AX , Australia's No 2 lender by market value, said on Wednesday it had increased the size of its perpetual hybrid offering to A$1.25 billion ($918 million) from its initial aim of A$750 million.

Westpac will become the first major Australian lender to raise capital after the Australian Prudential (LONDON:PRU) Regulation Authority (APRA) lifted the mortgage risk weights of the country's top banks to make them "unquestionably strong."

The margin of the hybrid issue was set at 400 basis points over the bank bill swap rate, in line with initial marketing spread. Hybrid securities are a mix of debt and equity. They feature interest payments but can also be converted to shares.

The issue, to be counted as additional Tier 1 capital, will be led by Westpac with a large syndicate including UBS, ANZ Bank, Commonwealth Bank of Australia and National Australia Bank, Reuters had earlier reported.

Westpac will announce the final size after the offer closes on Sept. 1, it said. ($1 = 1.3617 Australian dollars)

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