Westpac Banking : Issue of Tier 2 Capital - Cleansing Notice

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ASX	Level 18, 275 Kent Street
		Sydney, NSW, 2000
Release

18 November 2021

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Westpac Banking Corporation ("Westpac") - issue of US$1,250,000,000 3.020% Subordinated Notes due 2036 (the "2036 Tier 2 Subordinated Notes") and US$1,000,000,000 3.133% Subordinated Notes due 2041 (the "2041 Tier 2 Subordinated Notes" and, together with the 2036 Tier 2 Subordinated Notes, the "Tier 2 Subordinated Notes")

Cleansing notice under section 708A(12H)(e) of the Corporations Act 2001 (Cth) ("Act") as inserted by ASIC Corporations (Regulatory Capital Securities) Instrument 2016/71 ("Instrument")

1. Westpac will issue the Tier 2 Subordinated Notes today. Offers of the Tier 2 Subordinated Notes do not require disclosure to investors under Part 6D.2 of the Act.
2. Attached to this notice are the following:
3. 1. a description of the rights and liabilities attaching to the Tier 2 Subordinated Notes ("Terms") as set out under the "Description of the Subordinated Debt Securities" on pages 7 to 42 of the Form F-3ASR (Registration No. 333- 260703) ("Form F-3") of Westpac filed with the U.S. Securities and Exchange Commission on 3 November 2021 pursuant to the U.S. Securities Act of 1933, as amended, which is attached to this notice as Annex A, as supplemented by the "Description of the Notes" on pages S-24 to S-31 of the Prospectus Supplement dated 8 November 2021 in respect of the 2036 Tier 2 Subordinated Notes, and as supplemented by the "Description of the Notes" on pages S-23 to S-29 of the Prospectus Supplement dated 8 November 2021 in respect of the 2041 Tier 2 Subordinated Notes (together, the "Prospectus Supplements"), which are attached to this notice as Annex B and Annex C, respectively; and
   2. a description of the rights and liabilities attaching to the ordinary shares of Westpac as set out under the "Description of the Ordinary Shares" on pages 43 to 44 of the Form F-3, which is attached to this notice as Annex D.
4. The Tier 2 Subordinated Notes are expected to be treated as Tier 2 regulatory capital under the Basel III capital adequacy framework as implemented in Australia by the Australian Prudential Regulation Authority ("APRA").
5. If APRA determines that Westpac is or would become non-viable, the Tier 2 Subordinated Notes may be:
6. 1. Converted into fully paid ordinary shares in the capital of Westpac; or

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1. immediately and irrevocably Written-off (and rights attaching to the Tier 2 Subordinated Notes terminated) if for any reason Conversion does not occur within five ASX Business Days of APRA notifying Westpac of the determination,

in accordance with the Terms.

1. In order to enable ordinary shares in the capital of Westpac issued on Conversion to be sold without disclosure under Chapter 6D of the Act, Westpac has elected to give this notice under section 708A(12H)(e) of the Act as inserted by the Instrument. The Terms and the information in the attached Schedule are included in, and form part of, this notice.
2. Westpac confirms that:
3. 1. the information in this notice remains current as at today's date;
   2. this notice complies with section 708A of the Act, as notionally modified by the Instrument; and
   3. this notice complies with the content requirements of section 708A(12I) of the Act as inserted by the Instrument.
4. Unless otherwise defined, capitalised expressions used in this notice have the meanings given to them in the Form F-3 or Prospectus Supplements.

This document has been authorised for release by Tim Hartin, General Manager & Company Secretary.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

This market announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction.

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SCHEDULE

1. Effect on Westpac of the offer of the Tier 2 Subordinated Notes

The issuance of the Tier 2 Subordinated Notes is expected to raise Tier 2 regulatory capital to satisfy Westpac's regulatory requirements and maintain the diversity of Westpac's sources and types of capital funding.

The proceeds from the issue of the Tier 2 Subordinated Notes will be used for general corporate purposes. Those proceeds, less the costs of the issue, will be classified as loan capital in the financial statements of Westpac. The issue of the Tier 2 Subordinated Notes will not have a material impact on Westpac's financial position.

The proceeds of the issue, less the costs of the issue, are expected to increase Westpac's total capital ratio on a Level 2 basis by 0.7%.

1. Rights and liabilities attaching to the Tier 2 Subordinated Notes

The rights and liabilities attaching to the Tier 2 Subordinated Notes are set out in the Form F-3 as supplemented by the Prospectus Supplements.

1. Effect on Westpac of the issue of the ordinary shares if the Tier 2 Subordinated Notes are required to be Converted1

A key feature of APRA's requirements for Tier 2 regulatory capital instruments is that they absorb losses at the point of non-viability of the issuer. The Terms include provisions that require the Tier 2 Subordinated Notes to be Converted into ordinary shares in the capital of Westpac or Written-off on the occurrence of a Non-Viability Trigger Event. A Non-Viability Trigger Event will occur when APRA notifies Westpac in writing that it believes that relevant non-viability circumstances (as described in the definition of "Non-Viability Trigger Event" in the Terms) subsist, which could occur at any time.

If a Non-Viability Trigger Event occurs and Westpac Converts the Tier 2 Subordinated Notes and issues ordinary shares to Holders (as required under the Terms), the effect of Conversion on Westpac would be to reduce loan capital by the principal amount, less any unamortised costs of the issue, of the Tier 2 Subordinated Notes being Converted and increase Westpac's shareholders' equity (ordinary share capital) by a corresponding amount. APRA has not provided extensive guidance as to how it would determine non‑ viability. Non-viability could be expected to include serious impairment of Westpac's financial position and concerns about its capital, funding or liquidity levels and/or insolvency. APRA has indicated that non-viability is likely to arise prior to insolvency.

The number of ordinary shares issued on Conversion is variable, but is limited to the Maximum Conversion Number. Limiting the number of ordinary shares which may be issued to the Maximum Conversion Number means that it is likely that Holders will receive a number of ordinary shares that have a market value that is significantly less than the Outstanding Principal Amount of the Tier 2 Subordinated Notes. The Australian Dollar may depreciate in value against the U.S. Dollar by the time of Conversion. In that case, the Maximum Conversion Number is more likely to apply.

• If, in accordance with the Terms, Westpac is replaced by an Approved Successor as debtor of the Tier 2 Subordinated Notes and the issuer of ordinary shares, Tier 2 Subordinated Notes may be Converted into fully paid ordinary shares in the capital of an Approved Successor in accordance with the Terms. This notice also enables ordinary shares in the capital of an Approved Successor which is a NOHC for the purposes of the Banking Act 1959 (Cth) and the ultimate holding company of Westpac issued on Conversion to be sold without disclosure under Chapter 6D of the Act. Refer to the Terms and the Instrument for further information.

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The Maximum Conversion Number is calculated based on a VWAP set to reflect 20% of the Issue Date VWAP. The Maximum Conversion Number may be adjusted to reflect a consolidation, division or reclassification or pro rata bonus issue, of ordinary shares. However, no adjustment will be made to it on account of other transactions which may affect the price of ordinary shares, including for example, rights issues, returns of capital, buy- backs or special dividends.

The Maximum Conversion Number is 575.4939 Westpac ordinary shares per Tier 2 Subordinated Note (with a nominal value of US$2,000), based on the Issue Date VWAP of A$23.80. If Conversion of any Tier 2 Subordinated Notes does not occur for any reason within five ASX Business Days after the occurrence of the Non-Viability Trigger Event, the Tier 2 Subordinated Notes will be Written-off, and all corresponding rights and claims of Holders under the Terms (including with respect to payments of interest, the repayment of the Outstanding Principal Amount and upon Conversion, the receipt of ordinary shares) will be immediately and irrevocably written-off and terminated, with effect on and from the Non- Viability Trigger Event Date in accordance with the Terms, and investors will lose all or some of their investment and will not receive any compensation.

1. Rights and liabilities attaching to the ordinary shares in the capital of Westpac

Westpac was registered on 23 August 2002 as a public company limited by shares under the Act. Westpac's constitution was most recently amended at the general meeting held on 13 December 2012 ("Constitution", as amended from time to time). The ordinary shares in the capital of Westpac are admitted to trading on ASX. The rights attaching to the ordinary shares in the capital of Westpac are set out in the Act and the Constitution.

In addition, the rights and liabilities attaching to the ordinary shares in the capital of Westpac are described on pages 43 to 44 of the Form F-3 (attached in Annex D)2.

1. Additional information

Information about the Tier 2 Subordinated Notes is contained in the Form F-3 and the Prospectus Supplements.

Westpac is a disclosing entity for the purposes of the Act and, as a result, is subject to regular reporting and disclosure obligations under the Act and the ASX Listing Rules. In addition, Westpac must notify ASX immediately (subject to certain exceptions) if it becomes aware of information about Westpac that a reasonable person would expect to have a material effect on the price or value of its listed securities, including ordinary shares in the capital of Westpac.

Copies of documents lodged with the Australian Securities and Investments Commission ("ASIC") can be obtained from, or inspected at, an ASIC office and Westpac's ASX announcements may be viewed at www.asx.com.au.

Any person has the right to obtain copies of:

• Westpac's half-yearly and annual financial reports; and
• any continuous disclosure notices given by Westpac after the lodgement of the 2021 Westpac Group Annual Report, but before the date of this notice,

• If, in accordance with the Terms, Westpac is replaced by an Approved Successor as debtor of the Tier 2 Subordinated Notes and the issuer of ordinary shares, then on Conversion Holders will be issued with fully paid ordinary shares in the capital of the Approved Successor.

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from www.westpac.com.au/investorcentre, or by request made in writing to Westpac at:

Westpac Group Secretariat

Level 18

Westpac Place

275 Kent Street

Sydney NSW 2000

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