ANZ unit sets margin on NZ$400 mln Tier 2 issue

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SYDNEY, March 7 (Reuters) - ANZ National Bank, a unit of
Australian & New Zealand Banking Group Ltd (ANZ.AX: Quote, Profile, Research, Stock Buzz), has set
the margin on its up to NZ$400 million ($317 million) upper
Tier 2 capital issue at 200 basis points over five-year swap
rates, an investor said on Friday.

This is at the high end of the 175 to 200 bps pricing
range.

The bonds are unsecured, deeply subordinated and callable
after five years. The proceeds are for ongoing funding
requirements. The issuer can accept unlimited
oversubscriptions.

ANZ is lead manager and organising participant of the
issue.

The notes are expected to be rated A+ by S&P and Aa3 by
Moody's.

This is the second capital issue sold in a week in New
Zealand. Earlier, BNZ Income Securities, a unit of National
Australia Bank (NAB.AX: Quote, Profile, Research, Stock Buzz) raised NZ$320.5 million of Tier 1
capital at 220 bps over swap. See [ID:nSYD269446].

The main differences between the two capital raisings are
the distribution base, the type of capital and the issue
margins.

BNZ Income Securities predominantly placed its Tier 1 issue
with retail investors who took around 90 percent of the offer
because of the tax benefits offered. Details of ANZ National's
offer have not been disclosed but the issue structure favours
the participation of both institutional and retail investors
but does not offer tax benefits.

Another key difference is the type of capital, with BNZ
Income Securities opting for upper Tier 2 capital, while ANZ
National sold Tier 1 capital, the highest and most expensive
form of capital.

In a third area of difference, the margin of BNZ Income
Securities' issue does not reset, whereas the ANZ National
issue steps up by 100 basis points after 10 years.

Key dates of the ANZ offer are:

Offer closes: April 16

Rate set: April 17

Issue date: April 18

First call date: April 18, 2013

Second call date: April 18, 2018

Step-up margin after April 2018: +100bps
($1=NZ$1.26)
(Reporting by Cecile Lefort)