Suncorp sells A$40 mln 1-year notes, eyes Tier 1

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SYDNEY, May 5 (Reuters) - Suncorp-Metway Ltd (SUN.AX),
Australia's second-biggest home and car insurer, sold A$40
million ($37 million) of senior one-year notes at 50 basis
points over swap and BBSW, sole lead UBS said on Monday.

The offer consisted of A$10 million of fixed rate notes and
A$30 million of floating rate notes.

The bank is also expected to launch a Tier 1 capital issue
to bolster its balance sheet, according to market sources.

The offer is expected to be lead managed by Citi, JPMorgan,
Macquarie and UBS, the same sources said.

It is likely to be driven by retail demand rather than
institutional investors.

Suncorp and the four expected mandated banks declined
comment.

Tier 1 is a form of capital that banks are required to
maintain for their operations. It is the closest type to equity
and is also the most expensive form of debt for the bank.

The deal details are as follows:

Issuer: Suncorp-Metway Ltd

Facility: Fixed and floating rate notes

Documentation: Australian

Amount issued: A$40 million

Lead(s): UBS

Issuer rating: A+ (S&P), Aa3 (Moody's)

Tranche: Fixed FRN

Amount: A$10 mln A$30 mln

Maturity: May 8 2009 May 15 2009

Set date: May 8 May 15

Coupon: 8.250% +50bp/90-day BBSW

Yield: 8.300% +50bp/90-day BBSW

Spread: +50bp/swap +50bp/90-day BBSW

Issue price: 99.953 100
($1=A$1.07)
(Reporting by Cecile Lefort)