Westpac Banking Corporation yesterday put capital restructuring and mortgage rates back on the Big Four agenda when it surprised the markets with an equity capital raising, one of the largest this year. The bank will raise A$3.5 billion of ordinary equity through a fully underwritten, pro rata accelerated renounceable entitlement offer. It also announced an unexpected out of cycle mortgage rate rise of 20 basis points for all Westpac branded mortgages.The price of the 1-for-23 offer has been set at $25.50 per share, a discount of 13.1 per cent on the dividend adjusted "theoretical ex-rights price", the bank observed. This was based on a closing price of $30.44 before the trading halt was called. The bookbuild for institutional investors has commenced, and will close on 15 October. The retail component of the entitlement offer opens on 19 October and is scheduled to close on 11 November 2015. The underwriters for the share offer are Merrill Lynch and UBS.The approximately 138 million new shares that will be sold will increase the total number of ordinary Westpac shares on issue by about four per cent to 3,322 million.Trading in Westpac equities is expected to recommence on 19 October 2015.NAB's credit analysts suggested in a note to clients yesterday that the capital raising will add approximately 100 bps to Westpac's CET1 ratio, which is expected to be offset by a 110 bps fall in Westpac's CET1, once the recently announced increase in mortgage risk weights for Australian "advanced" banks comes into effect on 1 July 2016."Therefore, the estimated CET1 capital position as at 30 September of 9.4 per cent actually falls to 9.3 per cent when these two factors are taken into consideration on a pro forma basis," the NAB clients' note pointed out.Westpac was keen to make another point on capital adequacy: in documents filed with the ASX and in a presentation by CEO Brian Hartzer, it was emphasised that the transaction, if successful, will leave Westpac's CET1 ratio not only within the top quartile of banks globally, but in third place on an internationally comparable basis, at over 14 per cent.This builds on the $2 billon raised by Westpac through a dividend reinvestment program at its half-year results in May and the $0.5 billion raised from the partial sale of BT Investment Management.In total, these transactions will come close to matching the additional $6.0 billion in capital that the bank said it will need to have in place once new risk weightings come into force next year.