ANZ will tap the retail investor market for A$500 million of fresh capital. The bank launched a subordinated note issue yesterday that is expected to pay an initial yield in excess of seven per cent.The notes, which will be listed on the Australian Securities Exchange, will have a maturity date of June 2022, although ANZ may redeem them in June 2017. Redemption will be in cash.ANZ will not have discretion to withhold interest (unless it is insolvent).The notes will have a floating rate. The bank expects to pay a margin of 2.75 to three per cent over the bank bill rate, calculated on a quarterly basis.The notes will also be offered to institutional investors.The notes will not be protected under the Financial Claims Scheme. They will rank higher than the bank's perpetual convertible preference shares, CP3.ANZ group treasurer Rick Moscati said in a statement that the Australian Prudential Regulation Authority had yet to confirm the capital treatment of the notes.Moscati said: "ANZ expects that they will form part of our tier-two capital requirements."