Macquarie hybrid hits price target
Macquarie Group is to sell A$600 million in capital notes, the bank said yesterday. This is sufficient to retire the convertible preference shares that the new hybrids will replace.Macquarie said yesterday that it had set the margin on the capital notes at 400 basis points over the 180-day bank bill rate, which is at the low end of the margin projected on launch last week. The notes are intended to replace the $600 million of convertible preference shares issued in 2008. The 2008 CPS were very attractive, paying an 11.095 per cent, per annum cash coupon. The new capital notes will cost the bank little more than half that yield.The earliest call date on the Macquarie Group capital notes is June 2018.To qualify as additional tier-one capital the notes are perpetual and the coupons are non-cumulative, payable at the sole discretion of Macquarie. And there is a "non-viability trigger" upon the enforcing of which the notes will be converted immediately into ordinary Macquarie shares.