Macquarie Bank Limited launches $400 million Macquarie Bank Capital Notes Offer

Macquarie Bank Limited (ASX: MBL) (MBL) today announced its intention to raise $A400 million, with the ability to raise more or less, through the offer of Macquarie Bank Capital Notes (BCN). BCN are expected to be quoted on the Australian Securities Exchange (ASX) under the code MBLPA. BCN are fully paid, unsecured, subordinated, non-cumulative, mandatorily convertible notes issued by MBL at an Issue Price of $A100 per BCN. Distributions are scheduled to be paid semi-annually in arrears, subject to certain Payment Conditions.

Patrick Upfold, Macquarie CFO said, "Macquarie continues to have a strong balance sheet with well diversified funding sources and minimal reliance on short term wholesale funding markets. We have a strong capital base and the BCN Offer is consistent with Macquarie’s strategy to manage its capital mix and maintain a diverse source of funding."

BCN will qualify as Additional Tier 1 Capital of MBL for Australian Prudential Regulation Authority purposes.

The offer of BCN is made under a Prospectus which was lodged with the Australian Securities and Investments Commission (ASIC) and ASX today. The offer is available only to investors resident in Australia and to certain institutional investors.

The Prospectus is available at www.MacquarieBCNOffer.com.au, or by calling the BCN Offer Information Line, as per the details below. A replacement Prospectus containing the Margin is expected to be made available on 23 September 2014 (Replacement Prospectus) when the BCN Offer opens.

Macquarie Capital (Australia) Limited has been appointed as Sole Arranger and a Joint Lead Manager. ANZ Securities Limited, Citigroup Global Markets Australia Pty Limited, Commonwealth Bank of Australia, Evans and Partners Pty Limited, J.P. Morgan Australia Limited, Morgans Financial Limited and National Australia Bank Limited have also been appointed as Joint Lead Managers (collectively JLMs).

More information about the Offer

The Offer is expected to open on 23 September 2014 and consists of:

• Broker Firm Offer – to retail and high net worth clients of Syndicate Brokers, who are resident in Australia;
• a Securityholder Offer – to eligible holders of Macquarie Group Limited Ordinary Shares (ASX: MQG; ADR:MQBKY), Macquarie Group Capital Notes (ASX: MQGPA) or Macquarie Income Securities (ASX: MBLHB), who are resident in Australia; and
• a General Offer – to members of the general public who are resident in Australia.

Anyone who wants to invest in BCN will need to contact their Syndicate Broker (to apply under the Broker Firm Offer) or complete the online Application Form (to apply under the Securityholder Offer or General Offer) that will be available at www.MacquarieBCNOffer.com.au when the BCN Offer opens.

The closing date for the Securityholder Offer and the General Offer is expected to be 5.00pm (Sydney time) on 3 October 2014. The Closing Date for the Broker Firm Offer is expected to be 5.00pm (Sydney time) on 7 October 2014.

Further information

BCN are complex and not suitable for all investors. Potential investors should read the Replacement Prospectus in its entirety before deciding whether to apply to invest in BCN. If any part of the Replacement Prospectus is unclear, we recommend seeking guidance from a financial advisor or other professional adviser.

If you have any questions about BCN you can call the BCN Offer Information Line on 1300 634 564 (within Australia) or on +61 3 9415 4230 (International). The line is open from Monday to Friday 8.30am to 5.30pm (Sydney time), during the Offer Period. Applicants under the Broker Firm Offer may also call their Syndicate Broker.

Indicative timetable