Westpac tipped to seek $1.5b for new hybrid deal; hires big syndicate

afr.com:

Westpac’s latest hybrid deal, for which it mandated nine joint lead managers on Monday, is expected to shoot well past $1 billion.

Westpac is prepping a $1.5 billion hybrid deal. Natalie Boog

Street Talk understands the big four bank is aiming for a circa $1.5 billion deal size. It is expected to launch next week, thanks to Melbourne Cup – and Westpac’s annual results – hogging investors’ attention this week.

Flagging the mooted deal on Monday morning, Westpac said it had hired nine joint lead managers – Westpac Institutional Bank, ANZ Securities, CBA, Morgan Stanley, Morgans, NAB, Ord Minnett, Shaw and Partners and UBS – as well as three co-managers across Bell Potter, LGT Crestone Wealth Management and Wilsons.

The issue is expected to include a reinvestment offer for eligible Westpac Capital Notes 6 holders. It was announced alongside a 26 per cent jump in Westpac’s full-year profits to $7.2 billion, helped by strong growth in its institutional banking business. The bank also said it would run a $1.5 billion buyback and a 72¢ final dividend.

The new hybrid deal comes nearly 1½ years after Westpac last printed its last one.

The Westpac Capital Notes 9 raised $1.51 billion in July 2022 – double its initial $750 million ask – and saw the bank pay a 3.4 per cent margin over the three-month bank bill swap rate (BBSW). Despite the deal doubling in size, final pricing came at the tighter end of 3.4 per cent to 3.6 per cent initial pricing guidance.