The New Zealand subsidiaries of the Big Four banks are joining in with the latest rash of tier two note issues.Commonwealth Bank's ASB has launched an offer to raise up to NZ$400 million through the sale of tier two notes to retail investors. The 10-year notes will be priced at a margin to five-year swaps and carry a "BBB+" rating from Standard and Poor's, which is two notches below that of Commonwealth Bank.The offer of NZ$300 million with an option for NZ$100 million of over-subscriptions will formally open, and a margin will be set, on March 25. "ASB Subordinated Notes will be treated as Tier 2 Capital for ASB, and in certain circumstances will be exchanged for ordinary shares in Commonwealth Bank of Australia," ASB said.The notes maturing in June 2024 are subordinated and unsecured and are not guaranteed by Commonwealth Bank.S&P said the rating was two notches lower than for the parent because "we believe that Australia's legal and regulatory framework could allow authorities to instigate restructuring of a failing bank to the detriment of non-deferrable subordinated debt, and that if this were to occur, it could affect subordinate debt holders in CBA.""In addition, the subordinated securities contain a contingency clause that requires mandatory conversion into common equity or a write-down of principal on the activation of a non-viability trigger event."The arrangers for the issue are Commonwealth Bank and Goldman Sachs New Zealand.