HOT TOPICS:   2015 series  |  Double shots  | Top 10 at 10                                                  RESOURCES:    Economic calendar   |   Rent or buy

The comment stream

Reader poll

Which country's economy is likely to improve the most in 2015?

Choices

ASB borrows $400 mln at 6.65% in 'complex' 10-year debt issue

Posted in Bonds

ASB has issued $400 million worth of subordinated, unsecured debt securities that'll pay investors annual interest of 6.65% for five years.

The $400 million is the upper end of what the bank was seeking to borrow, with the offer touted as being for $300 million worth of $1 debt securities plus up to $100 million of oversubscriptions.

"The offer raises Tier 2 Capital to satisfy ASB Bank Limited's and (parent) Commonwealth Bank of Australia's regulatory capital requirements and maintain the diversity of ASB Bank Limited's and Commonwealth Bank of Australia's sources and types of capital funding," ASB says.

The offer of 10-year subordinated and unsecured debt has been described as "complex" by the Financial Markets Authority, which said the ASB securities might not be suitable for many investors.

The interest rate reflects a margin of 2.05% per annum over the five year swap rate of 4.60% on March 24. This interest rate applies until a potential call date on June 15, 2019. ASB says the interest rate will be reset on the call option date, assuming the notes aren't called and repaid, with the reset done at the same 2.05% margin. Interest will be paid quarterly in arrears.

The maturity date is June 15, 2024.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment in the box on the right or click on the "'Register" link at the bottom of the comments.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

1 Comments

Forgive my ignorance but what

Forgive my ignorance but what would the difference be between this and the "toxic waste" sold pre GFC in the US?