Australia's CBA to announce A$ Tier 1 issue-sources

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SYDNEY, Aug 11 (Reuters) - Commonwealth Bank of Australia
(CBA.AX) (CBA) is expected to announce an issue of hybrid Tier
1 capital shortly after releasing its full-year results on
Wednesday, sources familiar with the issue said on Tuesday.

CBA declined to comment.

A Tier 1 offer for CBA has been in the pipeline since
April, when the bank said it was exploring opportunities to
raise hybrid capital.

CBA, the country's third-largest lender, often targets
retail investors when it needs to raise Tier 1 hybrid capital.
Such securities usually offer franked dividends, or tax
benefits, and tend to offer an attractive return for
yield-starved buyers.

A hybrid offer by CBA currently yields around 8.5 percent
including the tax benefits, a source said.

Banks are required to maintain Tier-1 capital as a buffer
to protect bank deposits.

Tier 1 hybrid issuance has fallen by 80 percent this year,
Reuters data shows, as Australian banks chose to raise large
amounts of cash through popular share issues, boosting their
capital and lessening the need for hybrid Tier 1.

Westpac Banking Corp (WBC.AX) is the only bank that has
sold hybrid Tier 1 this year with a A$908 million issue
completed in March.
(Reporting by Cecile Lefort)