Westpac launched its latest issue of additional tier one capital or hybrid notes last Tuesday, seeking to raise at least A$750 million with a term to call of 5.5 years.Distributions will be paid at a margin of 490 basis points to 510 bps over the 90-day bank bill rate, adjusted for franking credits.Westpac Capital Notes 4 and will be listed on the ASX under the ticker code WBCPG.Past precedence points to sufficient demand being seen in the bookbuild, scheduled for May 25, to increase the issue size much closer to the $1 billion level that Westpac is expected to be seeking, and the margin will be set at 490 bps.Proceeds from the issue will be used to redeem the $760 million of WCTPA hybrid notes, which are due to be called on 30 June. Any surplus above this amount will bolster the bank's tier one capital.The 5.5-year term to maturity will see the notes become callable (subject to APRA approval) on 20 December 2021. The conversion date is the standard two years later, being due on 20 December 2023.The notes have all of the structural requirements that allow qualification as additional tier one capital. Distributions are deferrable and non-cumulative, the notes are perpetual in the event that the call option is not exercised by Westpac and conversion into Westpac ordinary shares is not possible under the minimum conversion ratio of 50 per cent (20 per cent in the case of mandatory conversion) of the volume weighted average price of Westpac shares at the time of note's issuance by Westpac.Capital and non-viability triggers are included, with the effect that should Westpac's common equity tier one capital ratio fall below 5.125 per cent or APRA declares the bank to be non-viable, the notes will immediately convert into ordinary shares. If this is not possible, the notes will simply be written-off with note holders' investment lost.Note holders will not rank with ordinary shareholders in a winding-up of the bank, as if conversion had occurred, as is provided for in some other additional tier one capital note issues.By opting for a December 2021 call date, Westpac has positioned the call date mid way between the March 2021 call date for the WBCPF notes, and the September 2022 call date of the WBCPE notes. Westpac did not opt for a 2023 call, and thereby avoided the need to offer a larger margin.A margin of at least 490 bps sits above the current 451 bps trading margin of the WBCPF notes and the 479 bps trading margin of the WBCPE notes. The difference appears to offer sufficient new issue premium to attract considerable investor demand.The minimum margin on the WBCPG notes is also above the current 470 bps trading margin offered on Commonwealth Bank's PERLS VIII notes, issued in March. The PERLS VIII notes are callable in October 2021.   Once again, a synthetic hybrid note can be created by combining a five-year Westpac term deposit in a portfolio with Westpac ordinary shares. The initial pre-tax yield