ANZ CPS offer FAQs - Shareholders

ANZ CPS offer FAQs

Q. What are CPS?
Q. What is Mandatory Conversion?
Q. When is the Mandatory Conversion date?
Q. How does Resale interact with Mandatory conversion?
Q. What are the Mandatory Conversion conditions?
Q. When will the Dividend Rate be set?
Q. What is the dividend rate for the first dividend period?
Q. What is the issue date VWAP?
Q. How do I find out about my CPS allocation?
Q. What is non-innovative residual tier 1 capital?

Q. What are CPS?
A. CPS are fully paid preference shares issued by ANZ, which will mandatorily convert into Ordinary Shares on 16 June 2014 (subject to certain conditions being satisfied). However ANZ may elect for a third party to purchase the CPS rather than delivering the Ordinary Shares issued on Conversion to the investor. CPS provides investors with Dividends that are preferred, non-cumulative, based on a floating rate and are expected to be fully or substantially franked. Dividends are scheduled to be paid quarterly in arrears on the Dividend Payment Dates, subject to the Payment Tests. You should read the CPS Prospectus (PDF 736kB) for a full description of CPS.

Q. What is Mandatory Conversion?
A. CPS Holders will receive Ordinary Shares on Conversion of the CPS on the earliest Mandatory Conversion Date unless the Mandatory Conversion Conditions are not satisfied or Resale occurs. Upon Conversion, CPS Holders will receive approximately $102.56 worth of Ordinary Shares per CPS based on the VWAP of Ordinary Shares during the 20 Business Days before the Mandatory Conversion Date.

For more information on the Mandatory Conversion you should read the CPS Prospectus (PDF 736kB).

Q. When is the Mandatory Conversion Date?
A. The Mandatory Conversion Date will be 16 June 2014 provided that all of the Mandatory Conversion Conditions are satisfied. If any of the Mandatory Conversion Conditions are not satisfied with respect to 16 June 2014, then the Mandatory Conversion Date will be deferred until the next Dividend Payment Date on which all of the Mandatory Conversion Conditions are satisfied.

For more information on Mandatory Conversion Date you should read the CPS Prospectus (PDF 736kB).

Q. How does Resale interact with Mandatory Conversion?
A. Before a possible Mandatory Conversion Date, ANZ may choose to arrange that all CPS on issue be acquired from CPS Holders by a third party (Nominated Purchaser) on the possible Mandatory Conversion Date. This process is called Resale. Resale can occur whether or not the Mandatory Conversion Conditions are satisfied.

If Resale is chosen by ANZ, CPS Holders will be notified and on the possible Mandatory Conversion Date they will receive $100 from the Nominated Purchaser for each CPS rather than a variable number of Ordinary Shares issued by ANZ.

For more information on Resale you should read the CPS Prospectus (PDF 736kB).

Q. What are the Mandatory Conversion Conditions?
A. The Mandatory Conversion Conditions are:

First Mandatory Conversion Condition: the VWAP of Ordinary Shares on the 25th Business Day before but not including a possible Mandatory Conversion Date is greater than 56% of the Issue Date VWAP.
Second Mandatory Conversion Condition: the VWAP of Ordinary Shares during the period of 20 Business Days before (but not including) a possible Mandatory Conversion Date is greater than 51.28% of the Issue Date VWAP.
Third Mandatory Conversion Condition: Ordinary Shares remain listed and admitted to trading on ASX, and trading of Ordinary Shares has not been suspended for at least five consecutive Business Days prior to a possible Mandatory Conversion Date and the suspension is continuing on the possible Mandatory Conversion Date.

For more information on the Mandatory Conversion Conditions you should read the CPS Prospectus (PDF 736kB).

Q. When will the Dividend Rate be set?
A. The Margin for the Dividend Rate was determined by the Bookbuild and is 2.50% per annum. The Dividend Rate for each Dividend Period will be set on the first Business Day of each Dividend Period and will be calculated using the following formula:

Dividend Rate = (Bank Bill Rate + Margin) x (1 - Tax rate)

The Bank Bill Rate used in calculating each Dividend will be the Bank Bill Rate on the first Business Day of the Dividend Period. You should read the CPS Prospectus (PDF 736kB) for more details on how the Dividend Rate will be set.

Q. What is the Dividend Rate for the first Dividend Period?
A. The Dividend Rate for the first Dividend Period ending on 14 December 2008 is 6.8752% per annum. This has been determined in accordance with the CPS terms as the 90 day Bank Bill Rate on 30 September 2008 of 7.3217% (being the Issue Date) plus the Margin of 2.50% per annum, together multiplied by (1 - the Tax Rate, which is 30%).

Q. What is the Issue Date VWAP?
A. The Issue Date VWAP has been calculated as $17.35. Accordingly, the Maximum Conversion Number has been set at 11.5274 ANZ ordinary shares per CPS. For details about the calculation of these numbers and how they affect CPS, see the CPS Prospectus (PDF 736kB).

Q. How do I find out about my CPS allocation?
A. You may find out how many CPS have been allocated to you by calling the ANZ Information Line on 1800 113 399 (within Australia), 0800 174 007 (within New Zealand) or +61 3 9415 4010 (international) or by asking your Syndicate Broker.

Q. What is Non-Innovative Residual Tier 1 Capital?
A. Under changes to bank capital adequacy from May 2006 and revised in July 2007 banks can issue both Innovative and Non-Innovative hybrid capital instruments totaling up to 25 percent of net Tier 1 capital. Of this, Innovative hybrid securities are limited to 15 percent, therefore banks need to issue 10 percent of their hybrid capacity in the form of Non-Innovative securities if they want to maximise the hybrid component of the capital mix.

For more information see the Prospectus or APRA's website at www.apra.gov.au

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