New Issue Announcement: 

Commonwealth Bank PERLS IX Capital Notes

CBA has launched a subordinated note issue with the new CommBank PERLS IX Capital Notes (CBAPF).  CBA is raising Tier 1 Capital to satisfy their regulatory capital requirements and maintain the diversity of their sources of funding.  This investment has the following characteristics:

• CBA PERLS IX are subordinated, unsecured notes.
• CBA is expected to raise $750m, with the ability to raise more or less.
• The CBA PERLS IX are expected to be quoted on the ASX under the code ‘CBAPF’.
• The price is $100 per share with the minimum application being 50 notes ($5,000).
• Distributions on CBA PERLS IX are paid quarterly and are preferred, non-cumulative floating rate payments and are expected to be fully franked.
• The distribution payments will be based on a floating rate.  The rate will be calculated based on the 90-Day BBSW (Currently 1.78%) plus a margin to be determined by a book build.  This margin is expected to be in the range of 3.90%-4.10% per annum over the 90 day BBSW.

This would equate to a grossed up annual return of 5.68% – 5.88% (3.98% fully franked at 390 basis point margin).

• The first distribution is scheduled to be paid on 15th June 2017.
• The notes rank ahead of Ordinary Shares and equally with other preference shares, but behind all creditors of CBA.
• Scheduled mandatory exchange date is 31st March 2024.  There is also an optional call date as at 31st March 2022.
• Morningstar report has recommended investors subscribe to the offer
• Further guidance on investing in bank hybrid securities (https://www.moneysmart.gov.au/investing/complex-investments/hybrid-securities-and-notes/bank-hybrid-securities) can be found on ASIC’s Money Smart website.

The prospectus for this issue can be found by clicking on the link below:

       http://www.asx.com.au/asxpdf/20170220/pdf/43g3lx14qghql6.pdf

The bidding for this issue may close early so I require expressions of interest by Wednesday 22nd February, 2017. Please email or call me on 07 5665 3633 to discuss the suitability of this new issue.