Monday, 26 October 2020, Brisbane: Bank of Queensland Limited (ASX: BOQ) (BOQ) today announced its intention to raise $200 million through the offer of Capital Notes 2 with the ability to raise more or less (Offer).

Capital Notes 2 are fully paid, unsecured, non‐cumulative, perpetual, subordinated, convertible notes which will pay, subject to the issue terms and BOQ's discretion, preferred floating rate quarterly distributions which are expected to be fully franked.

The Australian Prudential Regulation Authority (APRA) has confirmed that Capital Notes 2 are capable of being recognised as Additional Tier 1 Capital of BOQ for the purposes of APRA's prudential standards. As announced on 7 April 2020, BOQ received APRA's approval to redeem BOQ's A$150 million Wholesale Capital Notes which constituted Additional Tier 1 Capital, conditional on BOQ completely replacing the WCNs with a new Additional Tier 1 instrument at the first available opportunity. The Offer will satisfy this condition.

The proceeds of the Offer will be used for BOQ's general corporate and funding purposes. The Capital Notes 2 have an issue price of $100 each and are expected to be quoted on the Australian Securities Exchange (ASX) and trade under the ASX code "BOQPF".

Further information

Full details of this investment opportunity and the Capital Note 2 Terms are set out in the Prospectus lodged with the Australian Securities and Investments Commission (ASIC) and ASX today (Prospectus).

The Prospectus will be made available to Australian investors at www.boq.com.au/capitalnotes2or by calling the BOQ Offer Information Line below. A replacement Prospectus, containing the Margin and Application Forms, will be made available when the Offer opens, expected to be on 3 November 2020.

There are risks associated with investing in Capital Notes 2. Investors should read and consider the Prospectus and the Capital Note 2 Terms in full before deciding whether to invest in Capital Notes 2. BOQ strongly recommends that investors obtain professional advice which takes into account their particular investment objectives and circumstances before deciding whether to invest in Capital Notes 2. Capital Notes 2 are not guaranteed by, nor are they deposit liabilities of, BOQ.

Applications may only be made using the Application Form (either electronic or paper) that is attached to or accompanies the replacement Prospectus.

Goldman Sachs has been appointed as Arranger to the Offer. ANZ Securities, Morgans and National Australia Bank have been appointed as Joint Lead Managers. JBWere has been appointed as Co‐ Manager.

Further information about the Offer

The Offer comprises:

  • an Institutional Offer to certain Institutional Investors;
  • a Broker Firm Offer to Australian resident retail and high net worth clients of Syndicate Brokers; and
  • a Securityholder Offer to Eligible Securityholders1 on the register as at 7:00pm (Sydney time) on 23 October 2020.

Securityholders can access further information through the BOQ Offer Information Line 1800 779 639 (within Australia) or +61 1800 779 639 (from overseas), Monday to Friday from 8:30am to 7:30pm (AEDT) or at www.boq.com.au/capitalnotes2.

Key Features of Capital Notes 2

Distributions

Preferred, discretionary, non‐cumulative, based on a floating rate

Distributions are expected to be fully franked2

o if any Distribution payment is not fully franked, the

Distribution will be increased to adjust for any unfranked

component of the Distribution, based upon the applicable

Franking Rate

Scheduled to be paid quarterly in arrears (subject to no Payment

Condition existing) on the Distribution Payment Dates

o Distribution Payment Dates are 15 February, 15 May, 15

August, 15 November each year

o The first Distribution is scheduled to be paid on 15 February

2021

Calculated on a floating rate basis using the 3‐month Bank Bill

Swap Rate (BBSW) plus the Margin multiplied by (1 - t)3

  • An Eligible Securityholder is a registered holder of Ordinary Shares or Capital Notes 1 (as applicable) as at 7:00pm (Sydney time) on 23 October 2020, shown on the applicable register as having an address in Australia and not in the US or acting as a nominee for, or for the account or benefit of, a US Person, or not otherwise prevented from receiving the invitation to participate in the Offer or receiving Capital Notes 2 under the laws of any jurisdiction.
    2 Holders should be aware that the ability of a Holder to use franking credits will depend on their individual position and that the potential value of franking credits does not accrue at the same time as the cash Distribution is received.
    3 "t" is the Australian corporate tax rate applicable to the franking account of BOQ at the relevant Distribution Payment Date.

The Margin will be determined by the Bookbuild and is expected

to be in the range of 3.80% to 4.00%

Term

Perpetual (no fixed maturity date) unless Converted, Redeemed or

Resold

Optional Conversion, Redemption or Resale (subject to APRA's

prior written approval4, and provided certain conditions are

satisfied) on 14 May 20275 at BOQ's option, or following a Tax

Event or a Regulatory Event and Optional Conversion following

Potential Acquisition Event

Scheduled Mandatory Conversion into Ordinary Shares on 15 May

2029 if Mandatory Conversion Conditions are satisfied, unless

Capital Notes 2 are Redeemed or Converted earlier

Acquisition Event results in Conversion of Capital Notes 2, if

certain conditions are satisfied

Loss Absorption Event results in required Conversion of Capital

Notes 2 into Ordinary Shares and, if not Converted, Written‐Off

Optional Conversion,

Subject to APRA's prior written approval and provided certain

Redemption and / or

conditions are satisfied, BOQ may elect to:

Resale

o Convert, Redeem or Resell all or some Capital Notes 2 on the

Optional Conversion/Redemption/Resale Date;

o Convert, Redeem or Resell all or some Capital Notes 2

following a Regulatory Event or Tax Event; or

o Convert all (but not some only) Capital Notes 2 following a

Potential Acquisition Event

Mandatory Conversion

The Mandatory Conversion Date will be the Scheduled Mandatory

Date

Conversion Date provided that the Mandatory Conversion

Conditions are satisfied on that date

On a Mandatory Conversion Date, Capital Notes 2 Holders will

receive $101.01 worth of Ordinary Shares per Capital Note 2,

unless Capital Notes 2 have otherwise been Converted or

Redeemed earlier

If any of the Mandatory Conversion Conditions are not satisfied on

the Scheduled Mandatory Conversion Date, then the Mandatory

Conversion Date will be deferred until the next Distribution

Payment Date in respect of which all of the Mandatory Conversion

Conditions are satisfied

Mandatory Conversion in

BOQ must also Mandatorily Convert Capital Notes 2 to Ordinary

other circumstances

Shares in the following circumstances:

o If a Common Equity Trigger Event occurs;

o If a Non‐Viability Trigger Event occurs; or

o If an Acquisition Event occurs (subject to the applicable

Mandatory Conversion Conditions)

4 Holders should not assume that APRA's approval will be given.

  • As 15 May 2027 is not a Business Day, this date has been brought forward to the preceding Business Day.

Quoted on ASX

BOQ will apply to the ASX for Capital Notes 2 to be quoted on the

ASX and Capital Notes 2 are expected to trade under ASX code

"BOQPF"

Offer Timetable

KEY DATES FOR THE OFFER

DATE

Record Date for determining Eligible Securityholders for

7:00pm (Sydney time), 23 October

Securityholder Offer

2020

Lodgement of the original Prospectus with ASIC

26 October 2020

Bookbuild (to determine the Margin)

On or before 02 November 2020

Announcement of the Margin

02 November 2020

Lodgement of replacement Prospectus with ASIC

03 November 2020

Opening Date of the Offer

03 November 2020

Closing Date for the Securityholder Offer

5:00pm (Sydney time),

17 November 2020

Closing Date for the Broker Firm Offer

10:00am (Sydney time),

23 November 2020

Issue Date

30 November 2020

Capital Notes 2 commence trading on ASX

01 December 2020

Expected despatch of Holding Statements

01 December 2020

KEY DATES FOR CAPITAL NOTES 2

DATE

First quarterly Distribution Payment Date

15 February 2021

Optional Conversion / Redemption / Resale Date

14 May 20276

Scheduled Mandatory Conversion Date

15 May 2029

Dates may change

These dates are indicative only and are subject to change without notice. References to time are to Sydney time. BOQ, the Arranger and the Joint Lead Managers may agree to vary the timetable, including extending any Closing Date, closing the Offer early without notice or accepting late Applications, whether generally or in particular cases, at their discretion. BOQ may withdraw the Offer at any time before Capital Notes 2 are issued.

  • As 15 May 2027 is not a Business Day, this date has been brought forward to the preceding Business Day.

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original document
  • Permalink

Disclaimer

Bank of Queensland Limited published this content on 25 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 October 2020 22:34:01 UTC