ANZ has added a common equity trigger to its latest convertible preference share issue (CPS3), which was launched yesterday, making the securities eligible for transition relief under the Basel III rules.If the bank's tier-one ratio falls to 5.12 per cent these preference shares will be subject to mandatory conversion and also to a maximum conversion number.The application of the maximum conversion number may mean that CPS3 holders receive less than the face value of their securities upon conversion.ANZ is seeking to raise A$750 million of hybrid capital. The securities will pay between 3.1 and 3.3 per cent over the 180-day bank bill rate. The margin will be determined after the completion of the bookbuild on August 30.The pricing means the securities are aimed at the retail market. Secondary pricing on comparable hybrid securities for ANZ and National Australia Bank are at margins of more than 400 per cent, suggesting few institutional investors are likely to buy the latest ANZ hybrid at the proposed yield.CPS3 securities are perpetual and do not have a fixed maturity date. They have a mandatory conversion date of September 1, 2019. There is also a cash-call date prior to the conversion date.Another change from previous ANZ convertible preference share issues, designed to meet Australian Prudential Regulation Authority requirements, is that if a dividend is not paid on CPS3 the dividend restrictions apply to ordinary shares.In the CPS2 issue such dividend restrictions applied only to equal or junior ranking instruments.The bank's core tier-one (common equity) ratio was 5.4 per cent in the 2005/06 financial year and 5.2 per cent in 2006/07. But since the start of the financial crisis it has been substantially higher: 5.9 per cent in 2007/08; nine per cent in 2008/09; eight per cent in 2009/10, and 8.5 per cent in the first half of the current financial year.In presentations to investors yesterday, the bank said that at the current common equity ratio it would have to lose about $10 billion of capital to hit the trigger.