ANZ Capital Notes 7 & Capital Notes 2 Reinvestment Offer

Australia and New Zealand Banking Group Limited ABN 11 005 357 522
ANZ Centre Melbourne, Level 9A, 833 Collins Street, Docklands VIC 3008
News Release
For release: 15 February 2022

ANZ launches ANZ Capital Notes 7 Offer and
ANZ Capital Notes 2 Reinvestment Offer

ANZ announced today the offer of a new Additional Tier 1 Capital security, ANZ Capital
Notes 7, to raise A$1 billion with the ability to raise more or less (Offer).

ANZ also announced today that it will redeem ANZ Capital Notes 2 (ASX: ANZPE) (CN2) on
24 March 2022 (see below for more information).

The Offer contains a Reinvestment Offer under which Eligible CN2 Holders
1
may apply to
reinvest some or all of their CN2 Redemption Proceeds in ANZ Capital Notes 7.

Further details on how to apply for ANZ Capital Notes 7, including who is eligible to apply,
are described below. Details on how to contact the ANZ Information Line are contained at
the end of this release.

Key points

• Opening: The Offer is expected to open on 23 February 2022.

• Use of proceeds: ANZ will use the proceeds of the Offer to refinance CN2 and for
general corporate purposes.

• Regulatory capital: ANZ Capital Notes 7 will constitute Additional Tier 1 Capital under
current Australian Prudential Regulation Authority (APRA) standards.

• Joint Lead Managers and Co-Managers: ANZ Securities Limited, Commonwealth
Bank of Australia, E&P Corporate Advisory Pty Limited, Morgan Stanley Australia
Securities Limited, Morgans Financial Limited, National Australia Bank Limited, Ord
Minnett Limited, Shaw and Partners Limited, UBS AG, Australia Branch and Westpac
Institutional Bank have been appointed as Joint Lead Managers. Bell Potter Securities
Limited, Crestone Wealth Management Limited and JBWere Limited have been appointed
as Co-Managers.

How to apply

All Applications must be from an Institutional Investor or a client of a Syndicate Broker who
is either a Wholesale Investor, or a retail investor within the Notes Target Market who has
received personal advice from a licensed professional adviser. Applications (both for the New
Money Offer and the Reinvestment Offer) must be submitted through a Syndicate Broker
2


1
To be an Eligible CN2 Holder, you must: (1) have been a registered holder of CN2 at 7:00pm AEDT on 10 February 2022; (2) be
shown on the CN2 register as having an address in Australia; (3) not be in the United States or acting as a nominee for, or for the
account or benefit of, a US Person or not otherwise be prevented from receiving the invitation to participate in the Offer or ANZ
Capital Notes 7 under the laws of any jurisdiction; and (4) be an Institutional Investor or a client of a Syndicate Broker who is either
a Wholesale Investor, or a retail investor within the Notes Target Market who has received personal advice from a licensed
professional adviser.

2
The Syndicate Brokers include the Joint lead Managers, the Co-Managers and any brokers selected by the Joint Lead Managers to
participate in the Bookbuild. ASIC has published guidance on how to choose a professional adviser on its MoneySmart website. You
can also search ‘choosing a financial adviser’ at moneysmart.gov.au.

Australia and New Zealand Banking Group Limited ABN 11 005 357 522
ANZ Centre Melbourne, Level 9A, 833 Collins Street, Docklands VIC 3008
and you should contact your Syndicate Broker for instructions on how to apply once the
Offer opens.

• Offer Structure: The Offer comprises:

• a Reinvestment Offer, under which Eligible CN2 Holders may apply through their
Syndicate Broker to have some or all of their CN2 Redemption Proceeds reinvested in
ANZ Capital Notes 7;

• a New Money Offer, under which a client of a Syndicate Broker who is either a
Wholesale Investor, or a retail investor within the Notes Target Market who has
received personal advice from a licensed professional adviser, may apply through
their Syndicate Broker for an allocation of ANZ Capital Notes 7 (other than under the
Reinvestment Offer); and

• an Institutional Offer, under which certain Institutional Investors invited by ANZ
Securities may bid for ANZ Capital Notes 7 in the Bookbuild.

• No securityholder offer: Consistent with ANZ’s announcement on 31 January 2022,
the Offer does not contain a specific offer for ANZ securityholders which means that ANZ
securityholders, including Eligible CN2 Holders, cannot apply directly to ANZ to
participate in the Offer, including the Reinvestment Offer.

• Notes Target Market: ANZ has made a Target Market Determination for ANZ Capital
Notes 7 in accordance with its obligations under the new design and distribution
obligations legislation. The Target Market Determination describes, among other things,
the class of retail investors that comprise the target market for ANZ Capital Notes 7
(Notes Target Market). The Target Market Determination is available at
capitalnotes.anz.com.

• Closing Dates: The Reinvestment Offer is scheduled to close at 5:00pm on 15 March
2022. The New Money Offer is scheduled to close at 10:00am on 22 March 2022.

Further information about the Reinvestment Offer

A key element of the Offer is the Reinvestment Offer that will help enable ANZ to refinance
CN2. Participation in the Reinvestment Offer by Eligible CN2 Holders is optional and subject
to satisfaction of the criteria set out above in the How to apply section.

• Redemption of CN2: Today, ANZ issued a redemption notice in accordance with the
CN2 terms. The redemption notice confirms that on 24 March 2022, ANZ will redeem all
CN2 for their face value of $100 per CN2. If any conditions to the redemption are not
satisfied, the redemption may not occur.

• Reinvestment Offer: Eligible CN2 Holders may apply through a Syndicate Broker to
have some or all of their CN2 Redemption Proceeds reinvested in ANZ Capital Notes 7.

• Additional ANZ Capital Notes 7: Eligible CN2 Holders will also have the opportunity to
apply through a Syndicate Broker for additional ANZ Capital Notes 7 under the New
Money Offer.

ANZ Capital Notes 7 and further information

The ANZ Capital Notes 7 Prospectus, attached to this release (Prospectus), has been
lodged with ASIC and is available within Australia at capitalnotes.anz.com. A replacement
Prospectus, containing the Margin, will be made available on the ASX and at
capitalnotes.anz.com when the Offer opens.

Investors who meet the criteria to participate in the Offer (set out in the How to apply
section above) and who wish to apply for ANZ Capital Notes 7 should read the Prospectus in

its entirety. ANZ Capital Notes 7 are complex, involve increased risks compared to other
less risky and less complex bank investments such as deposits and may not be suitable for
all investors.

The Prospectus can only be obtained electronically at capitalnotes.anz.com and ANZ will not
be providing paper copies of the Prospectus.

Key features of ANZ Capital Notes 7

• ANZ Capital Notes 7 are fully paid, convertible, perpetual, unsecured, subordinated notes
issued by ANZ.

• Distributions on ANZ Capital Notes 7 are payable in cash based on a floating rate and are
non-cumulative. Distributions are scheduled to be paid quarterly in arrears, subject to a
Payment Condition not existing and ANZ’s absolute discretion.

• The Distribution Rate will be calculated as the sum of the applicable 3 month BBSW rate
plus the Margin, together multiplied by (1 – the Australian corporate tax rate, which is
currently 30%). Distributions are expected to be franked at the same rate as dividends
on Ordinary Shares. If a Distribution is not fully franked, ANZ will pay an additional
amount in cash to compensate holders for the unfranked component.

• The Margin will be determined under the Bookbuild scheduled for 22 February 2022 and
is expected to be in the range of 2.7% to 2.9%.

• ANZ may elect to Convert, Redeem or Resell all or some ANZ Capital Notes 7 that are
outstanding on 20 March 2029, 20 June 2029 or 20 September 2029, or following a Tax
Event or Regulatory Event. Conversion, Redemption or Resale is subject to certain
conditions, including APRA’s prior written approval.

• ANZ Capital Notes 7 will Convert into a variable number of ANZ Ordinary Shares on 20
September 2031 (subject to the Mandatory Conversion Conditions being satisfied),
unless they are Converted, Redeemed or Resold earlier.

• Where a Trigger Event occurs (which includes where ANZ encounters severe financial
difficulty), the ANZ Capital Notes 7 are required to be Converted or Written Off. Holders
are likely to suffer loss if ANZ Capital Notes 7 are Converted or Written Off as a result of
a Trigger Event.

• ANZ must Convert all ANZ Capital Notes 7 if a Change of Control Event occurs, subject
to certain conditions.

Capitalised terms in this release have the meaning given to them in the Prospectus.

For investor enquiries about the ANZ Capital Notes 7 Offer please visit
capitalnotes.anz.com or call the ANZ Information Line on 1800 113 399 (within
Australia) or +61 3 9415 4010 (international) (Monday to Friday – 8:30am to
5:30pm AEDT).

For media enquiries only contact:
Stephen Ries, Head of Corporate Communications +61 409 655 551


Approved for distribution by ANZ’s Continuous Disclosure Committee

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED
STATES OF AMERICA. This announcement does not constitute financial product advice or an offer of any
securities for sale. The securities referenced have not been and will not be registered under the U.S.
Securities Act of 1933, as amended (Securities Act), or the securities laws of any state or jurisdiction of
the United States and may not be offered, sold or resold, directly or indirectly, in the United States or
to, or for the account or benefit of, any U.S. person (as defined in Regulation S under the Securities
Act), except pursuant to an exemption from, or in a transaction not subject to, the Securities Act.

Key dates for the ANZ Capital Notes 7 Offer
Lodgement of the Prospectus with ASIC 15 February 2022
Bookbuild to determine the Margin 22 February 2022
Lodgement of the replacement Prospectus with ASIC and
announcement of the Margin
23 February 2022
Opening Date 23 February 2022
Closing Date for the New Money Offer (other than applications
to reinvest CN2)
10.00am on 22 March 2022
Issue Date 24 March 2022
ANZ Capital Notes 7 commence trading on ASX (normal
settlement basis)
25 March 2022
Confirmation Statements despatched by 31 March 2022
Record date for the first Distribution 7:00pm on 8 June 2022
First Distribution Payment Date 20 June 2022
First Optional Exchange Date 20 March 2029
3

Mandatory Conversion Date 20 September 2031
4

Key dates for the Reinvestment Offer
Record date for determining Eligible CN2 Holders for the
Reinvestment Offer (relevant CN2 must also be held on the
Closing Date for the Reinvestment Offer)
7:00pm on 10 February 2022
Opening Date for the Reinvestment Offer 23 February 2022
Closing Date for the Reinvestment Offer 5:00pm on 15 March 2022
Record date for the Final CN2 Distribution 7:00pm on 16 March 2022
Payment date for the Final CN2 Distribution 24 March 2022
Payment date for the CN2 Redemption Price 24 March 2022
Issue date for ANZ Capital Notes 7 24 March 2022

The key dates and times for the Offer are indicative only and may change without notice.

A reference to time is to Melbourne, Australia time.

3
20 June 2029 and 20 September 2029 are also Optional Exchange Dates.
4
Due to the Business Day convention, the Mandatory Conversion Date is deferred from 20 September 2031 to 22 September 2031.

ANZ CAPITAL NOTES 7
PROSPECTUS
PROSPECTUS FOR THE ISSUE OF ANZ
CAPITAL NOTES 7 TO RAISE $1 BILLION
WITH THE ABILITY TO RAISE MORE OR LESS
ISSUER
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED (ABN 11 005 357 522)
JOINT LEAD MANAGERS
ANZ SECURITIES
COMMONWEALTH BANK OF AUSTRALIA
E&P CORPORATE ADVISORY
MORGAN STANLEY
MORGANS
NATIONAL AUSTRALIA BANK
ORD MINNETT
SHAW AND PARTNERS
UBS
WESTPAC INSTITUTIONAL BANK
CO–MANAGERS
BELL POTTER
CRESTONE WEALTH MANAGEMENT
JBWERE

IMPORTANT NOTICES
About this Prospectus
This Prospectus relates to the offer by Australia and
New Zealand Banking Group Limited (ABN 11 005 357 522)
(ANZ) of mandatorily convertible subordinated perpetual
securities (ANZ Capital Notes 7 or Notes) to raise
$1 billion with the ability to raise more or less.
This Prospectus is dated 15 February 2022 and was
lodged with ASIC on that date. This Prospectus expires
on 15 February 2023 and no Notes will be issued on
the basis of this Prospectus after that date.
ASIC and ASX take no responsibility for the contents
of this Prospectus nor for the merits of the investment
to which this Prospectus relates.
This Prospectus also contains information in relation
to the Reinvestment Offer. Neither ANZ nor any other
person is providing any investment advice or making
any recommendation to Eligible CN2 Holders in respect
of the Reinvestment Offer through this Prospectus.
ANZ Capital Notes 7 are higher risk than deposits
ANZ Capital Notes 7 are issued by ANZ under the Note
Terms and Holders have no claim on ANZ except as
provided in those Note Terms.
ANZ Capital Notes 7 are not:
•deposit liabilities of ANZ;
•protected accounts for the purposes of the depositor
protection provisions in Division 2 of Part II of the Banking
Act or of the Financial Claims Scheme established under
Division 2AA of Part II of the Banking Act; or
•guaranteed or insured by any government, government
agency, compensation scheme or by any other person.
The risks associated with the Notes (which are
summarised in Section 1.5 and detailed in Section 6)
could result in the loss of your investment and associated
income. The investment performance of the Notes is not
guaranteed by ANZ.
A comparison of the differences between the Notes
and deposits is contained in Section 1.4.
Defined words and expressions
Some capitalised words and expressions used in this
Prospectus have defined meanings. The Glossary in
Appendix B defines these words and expressions.
The definitions specific to the Notes are in clause 17.2
of the Note Terms in Appendix A.
Exposure period
The Corporations Act prohibits ANZ from processing
Applications in the seven day period after 15 February
2022 (which may be extended by ASIC for up to a further
seven days), being the date on which this Prospectus
was lodged with ASIC. This period is referred to as the
Exposure Period. The purpose of the Exposure Period
is to enable this Prospectus to be examined by market
participants before the Offer Period commences.
No Applications received will be accepted until after
the expiry of the Exposure Period.
How to access this Prospectus
This Prospectus can be obtained electronically from
capitalnotes.anz.com. ANZ will not be providing paper
copies of this Prospectus.
This Prospectus is only available to you if you are accessing
and downloading it in Australia. If you access an electronic
copy of this Prospectus you should ensure that you
download and read the entire Prospectus.
How to apply
All Applications (both for the New Money Offer and the
Reinvestment Offer) must be submitted through a Syndicate
Broker and you should contact your Syndicate Broker
for instructions on how to apply once the Offer opens.
The Offer does not contain a specific offer for ANZ
securityholders (unlike previous retail hybrid security
offers by ANZ) and Eligible CN2 Holders cannot apply
directly to ANZ to participate in the Reinvestment Offer.
For more information on who is eligible to apply for Notes
under the Offer and how to make an Application – read
Section 4.
Application Forms
The Corporations Act prohibits any person from passing
an Application Form to another person unless it is
attached to or accompanied by a printed copy of this
Prospectus or the complete and unaltered electronic
version of this Prospectus.
Providing personal information
You will be asked to provide personal information to
ANZ (directly or via its agents) if you apply for the Notes.
See Sections 4.3 and 8.10 for information on how ANZ
(and its agents) collect, hold, use and disclose this
personal information.
No representations other than in this Prospectus
You should rely only on information in this Prospectus.
No person is authorised to provide any information
or to make any representation in connection with the
Offer that is not contained in this Prospectus. Any
information or representation not contained in this
Prospectus may not be relied upon as having been
authorised by ANZ in connection with the Offer.
The financial information provided in this Prospectus
is for information purposes only and is not a forecast
of operating results to be expected in future periods.
Diagrams
The diagrams used in this Prospectus are illustrative only.
They may not necessarily be shown to scale.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
Investment Overview
About the Reinvestment OerAbout ANZ Capital Notes 7
« CONTENTS

GUIDANCE FOR INVESTORS
Read this
Prospectus
in full
This Prospectus is important and you should read it in its entirety.
In considering whether to apply for Notes, it is important that:
•if you are a Retail Investor, you are within the Notes Target Market. The Notes Target Market is set
out in Section 4.1. If you are a Retail Investor, you can only apply for the Notes if you are within the
Notes Target Market and have received professional advice in relation to your application
(see below for further details); and
•you consider all risks and other information regarding an investment in Notes in light of your
particular investment objectives and circumstances, as the Offer and the information in this
Prospectus do not take into account those objectives and circumstances.
Understand
the risks
The Notes are complex, involve increased risks (outlined below) compared to other less risky and
less complex bank investments such as deposits and are not suitable for investors outside the Notes
Target Market. You should not see the Notes as an alternative to investments such as deposits.
The overall complexity of the Notes may make the Note Terms difficult to understand.
The Notes are not guaranteed or insured by any government, government agency, compensation
scheme or by any other person.
If ANZ encounters severe financial difficulty, the Notes may be Converted into Ordinary Shares or
Written-Off and you may suffer a loss of your investment as a consequence.
Distributions on the Notes may not be paid.
The Notes may never Convert or be Redeemed and may remain on issue indefinitely.
The market price of Notes may move up and down.
The liquidity of the Notes may be low and you may be unable to sell Notes.
If you do not fully understand how the Note Terms work or the risks associated with the Notes,
you should not invest in them.
Speak to your
Syndicate
Broker or
professional
adviser
If you wish to apply for Notes, you must speak to your Syndicate Broker. All Applications must
be submitted through a Syndicate Broker. No Applications can be made directly to ANZ.
If you are a Retail Investor and you wish to participate in the Offer, you must seek professional advice
as to whether you are within the Notes Target Market and whether the investment in the Notes is
suitable in light of your particular objectives, financial situation and needs.
If you have any questions about the Offer, the Notes or the Notes Target Market, you should also
contact your Syndicate Broker or seek advice from a professional adviser who is licensed by ASIC to
give that advice.
ASIC has published guidance on how to choose a professional adviser on its MoneySmart website.
You can also search 'choosing a financial adviser' at moneysmart.gov.au.
Consider
the ASIC
guidance for
Retail Investors
ASIC has warned investors to be cautious in relation to investments in hybrid securities
(such as the Notes). Investors should consider the ASIC guidance on hybrid securities which is
published on ASIC’s MoneySmart website. You can find this guidance by searching ‘hybrid securities
and notes’ at moneysmart.gov.au. The guidance includes a series of questions you should ask before
you invest in hybrid securities.
Learn more
about investing
in bank hybrid
securities
ANZ has developed a website containing an introductory guide to bank hybrid securities which may
assist you to better understand bank hybrid securities, their features and their risks. The guide explains
the different ways you may invest in a bank, including by depositing money or investing in securities
issued by a bank.
The guide is available at shareholder.anz.com/education/hybrids.
Obtain further
information
about ANZ and
ANZ Capital
Notes 7
ANZ is subject to regular reporting and disclosure obligations under the Corporations Act and the
Listing Rules. ANZ must notify ASX immediately (subject to certain exceptions) if it becomes aware
of information about ANZ that a reasonable person would expect to have a material effect on the
price or value of its securities including ANZ Capital Notes 7.
Copies of documents lodged with ASIC which are publicly available can be obtained from ASIC's
website asic.gov.au (a fee may apply) and ANZ’s ASX announcements may be viewed at asx.com.au.
Enquiries
If you have any questions in relation to the Offer or an Application, please call the
ANZ Information Line on 1800 113 399 (within Australia) or +61 3 9415 4010 (international)
(Monday to Friday – 8.30am to 5.30pm) or contact your Syndicate Broker or other professional
adviser who is licensed by ASIC to give such advice.
01
How to ApplyAbout ANZTaxation SummaryAdditional InformationAppendixInvestment Risks

CONTENTS
IMPORTANT
NOTICES
Inside front cover
GUIDANCE FOR
INVESTORS
Page 01
KE Y DATE S
Page 03
APPENDIX A
NOTE
TERMS
Page 86
APPENDIX B
GLOSSARY
Page 109
CORPORATE
DIRECTORY
Pa g e 120
SECTION 01
INVESTMENT
OVERVIEW
Page 05
01
SECTION 02
ABOUT
ANZ CAPITAL
NOTES 7
Page 16
02
SECTION 03
ABOUT THE
REINVESTMENT
OFFER
Page 37
03
SECTION 04
HOW TO
APPLY
Page 43
04
SECTION 05
ABOUT
ANZ
Page 47
05
SECTION 06
INVESTMENT
RISKS
Page 57
06
SECTION 07
TA X ATION
SUMMARY
Page 75
07
SECTION 08
ADDITIONAL
INFORMATION
Page 80
08
02
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
About the Reinvestment OfferAbout ANZ Capital Notes 7
Investment Overview
CONTENTS

KEY DATES
KEY DATES FOR THE OFFERDATE
Record date for determining Eligible CN2 Holders for the Reinvestment Offer
(relevant CN2 must also be held on the Closing Date for the Reinvestment Offer)
7.00pm on 10 February 2022
Lodgement of this Prospectus with ASIC15 February 2022
Bookbuild to determine the Margin22 February 2022
Lodgement of the replacement Prospectus with ASIC and
announcement of the Margin
23 February 2022
Opening Date23 February 2022
Closing Date for the Reinvestment Offer5:00pm on 15 March 2022
Closing Date for the New Money Offer 10:00am on 22 March 2022
Issue Date24 March 2022
ANZ Capital Notes 7 commence trading on the ASX on a normal settlement basis25 March 2022
Confirmation Statements despatched by31 March 2022
KEY DATES FOR ANZ CAPITAL NOTES 7DATE
Record Date for the first Distribution7.00pm on 8 June 2022
First Distribution Payment Date
1
20 June 2022
First Optional Exchange Date
2
20 March 2029
Mandatory Conversion Date20 September 2031
3

1 Distributions are scheduled to be paid quarterly at the end of each Distribution Period (on 20 March, 20 June, 20 September and 20 December each year)
subject to ANZ’s absolute discretion and the Payment Conditions. If any of these scheduled dates are not Business Days, then the Distribution Payment Date
will occur on the next Business Day.
2 20 June 2029 and 20 September 2029 are also Optional Exchange Dates.
3 Due to the Business Day convention, the Mandatory Conversion Date is deferred from 20 September 2031 to 22 September 2031. The Mandatory Conversion
Date may be later than 22 September 2031, or may not occur at all, if the Mandatory Conversion Conditions are not satisfied – see Section 6.1.8.
03
How to ApplyAbout ANZTaxation SummaryAdditional InformationAppendixInvestment Risks

KEY DATES FOR ANZ CAPITAL
NOTES 2 (CN2) HOLDERS
KEY DATES FOR ANZ CAPITAL NOTES 2 (CN2) HOLDERSDATE
Redemption notice given in respect of CN215 February 2022
Last day of trading in CN214 March 2022
Record date for the Final CN2 Distribution 7.00pm on 16 March 2022
Payment date for the Final CN2 Distribution
4
24 March 2022
Payment date for CN2 Redemption Price 24 March 2022
A reference to time in this Prospectus is to Melbourne, Australia time unless otherwise stated. A reference to $, A$, AUD,
dollars and cents is to Australian currency unless otherwise stated. Unless otherwise stated, all figures have been rounded
to two decimal places.
4 Payment of the Final CN2 Distribution is subject to the payment conditions in the CN2 terms and ANZ's absolute discretion.
Dates may change
The key dates for the Offer including the Reinvestment Offer are indicative only and may change without notice
(other than the dates that have passed and the key dates in connection with the CN2 Redemption which are fixed, unless
CN2 are required to be converted or written-off before 24 March 2022 or APRA revokes its approval of the CN2 Redemption).
ANZ and the Joint Lead Managers may bring forward or extend any Closing Date without notice, or withdraw the Offer at
any time before the Notes are issued.
You are encouraged to apply as soon as possible after the Opening Date.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
04
Investment Overview
« CONTENTS
About the Reinvestment OfferAbout ANZ Capital Notes 7

THIS SECTION PROVIDES A SUMMARY
OF THE KEY FEATURES AND RISKS OF
ANZ CAPITAL NOTES 7.
IF YOU WISH TO APPLY FOR NOTES, IT IS
IMPORTANT THAT YOU FIRST READ THIS
PROSPECTUS (INCLUDING THE NOTES
TARGET MARKET) IN FULL. IF YOU HAVE
ANY QUESTIONS ABOUT THE OFFER, THE
NOTES OR THE NOTES TARGET MARKET,
YOU SHOULD CONTACT YOUR SYNDICATE
BROKER OR SEEK ADVICE FROM A
PROFESSIONAL ADVISER WHO IS LICENSED
BY ASIC TO GIVE THAT ADVICE.
01
SECTION 01
INVESTMENT
OVERVIEW
How to ApplyAbout ANZTaxation SummaryAdditional InformationAppendixInvestment Risks
05

TopicSummaryWhere to find
more information
IssuerAustralia and New Zealand Banking Group Limited
(ABN 11 005 357 522) (ANZ).
Section 5
Type of instrumentANZ Capital Notes 7 are:
•fully paid – at $100 per Note;
•convertible – in certain circumstances, the Notes will Convert into
Ordinary Shares;
•redeemable and resaleable – in certain circumstances, ANZ may be
permitted to repay the Face Value of the Notes or transfer the Notes to a
third party (but there are significant restrictions on repayment or transfer
of the Notes);
•non-cumulative – Distributions are discretionary and unpaid
Distributions do not accumulate. Holders will not have any right
to compensation if ANZ does not pay a Distribution;
•perpetual – the Notes do not have any fixed maturity date and could
remain on issue indefinitely if they are not Converted or Redeemed
(in which case you would not receive your capital back or be issued
any Ordinary Shares);
•unsecured – they are not guaranteed or secured, are not deposit
liabilities of ANZ and are not protected accounts for the purposes of
the Banking Act;
•subordinated – although they have priority over Ordinary Shares and
rank equally with Equal Ranking Instruments, they are subordinated to
the claims of Senior Creditors (including ANZ depositors) in a winding-up;
•exposed to Trigger Events – where a Trigger Event occurs (which
includes where ANZ encounters severe financial difficulty), the Notes
are subject to Conversion into Ordinary Shares or Write Off, in which
case Holders are likely to suffer loss; and
•listed – ANZ will apply for Notes to be listed on ASX and Notes are
expected to trade under ASX code “ANZPJ”.
The Note Terms are complex and derive from the detailed capital
requirements which APRA applies to these instruments, including that
the Notes absorb losses by being Converted or Written Off where a Trigger
Event (including severe financial difficulty) occurs. In this way, the Notes
and ANZ’s other regulatory capital instruments help to protect ANZ’s
depositors and Senior Creditors from losses ANZ may incur.
ANZ’s ability to pay a Distribution or to Convert, Redeem or Resell the Notes
at its option are in each case subject to a number of restrictions, including,
in the case of payment of a Distribution, APRA not objecting to the
Distribution and, in the case of Conversion, Redemption or Resale, APRA
giving its prior written approval to the Conversion, Redemption or Resale.
Offer size$1 billion, with the ability to raise more or less.
There is no minimum subscription amount under the Offer.
Face Value$100 per Note. This is the price you need to pay to apply for each
Note under this Prospectus.
1.1 KEY FEATURES OF THE OFFER AND ANZ CAPITAL NOTES 7
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
06
Investment Overview
« CONTENTS
About the Reinvestment OfferAbout ANZ Capital Notes 7

TopicSummaryWhere to find
more information
Purpose of the OfferANZ is issuing the Notes to help meet the capital requirements for ADIs
set by APRA. APRA requires ANZ to maintain a level of regulatory capital
to help promote the stability of ANZ and protect ANZ’s depositors and
other creditors.
Regulatory
treatment
APRA has confirmed that the Notes will constitute Additional Tier 1 Capital
for the purposes of ANZ’s regulatory capital requirements.
Use of proceedsANZ will use the proceeds of the Offer to refinance CN2 and for general
corporate purposes.
DistributionsDistributions are cash payments on the Notes which are scheduled
to be paid quarterly until all Notes are Converted or Redeemed.
The Distribution Rate is calculated in accordance with the
following formula:
Distribution Rate = (BBSW Rate + Margin) x (1 – Tax Rate)
Where:
•Margin is the margin determined under the Bookbuild
(expected to be in the range of 2.7% to 2.9%); and
•Tax Rate is the Australian corporate tax rate applicable to the franking
account of ANZ as at the relevant Distribution Payment Date. As at the
date of this Prospectus, the Tax Rate is 30%.
Section 2.1
FrankingDistributions paid on the Notes are expected to be franked at the
same rate as dividends on Ordinary Shares.
The effect of the Distributions being franked is to reduce the cash amount
received by Holders on each Distribution Payment Date by an amount
equal to the relevant level of franking. If a Distribution is not fully franked,
ANZ will pay an additional amount in cash to compensate the Holder for
the unfranked component.
If Distributions are franked, the value and availability of franking credits to
a Holder will depend on that Holder’s particular circumstances and the tax
rules that apply at the time of each Distribution. The availability of franking
credits is not guaranteed and will depend on a number of factors, including
the level of profits generated by the ANZ Group that will be subject to tax
in Australia. Holders should refer to the Australian taxation summary in
Section 7.
Section 2.1.3
Payment of
Distributions
Payments of Distributions are at the absolute discretion of ANZ, which
means ANZ does not have to pay them. Distributions are also only payable
if the Payment Conditions are satisfied.
Distributions are non-cumulative which means that unpaid Distributions
do not accumulate and Holders will not have any right to compensation
if ANZ does not pay a Distribution. Failure to pay a Distribution when
scheduled will not constitute an event of default.
If a Distribution is not paid in full on a Distribution Payment Date, subject
to certain exceptions, ANZ cannot pay or resolve to pay any Ordinary Share
Dividend, or undertake any Buy-Back (as defined in the Note Terms) or
Capital Reduction, until and including the next Distribution Payment Date
(unless the Distribution is paid in full within 3 Business Days of the
Distribution Payment Date).
Sections 2.1.5 –
2.1.9
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TopicSummaryWhere to find
more information
Distribution
Payment Dates
The Distribution Payment Dates are, generally, 20 March, 20 June,
20 September and 20 December.
The first Distribution is scheduled to be paid on 20 June 2022.
You should note that the first Distribution Period is shorter than
the normal Distribution Period.
Section 2.1.5
Do ANZ Capital
Notes 7 have a
maturity date?
Holders should be aware that the Notes do not have a fixed maturity
date. While the Notes are scheduled to Convert into Ordinary Shares on
20 September 2031,
5
that Conversion is subject to conditions which may
never be met. Accordingly, if the Notes are not Exchanged (via Conversion,
Redemption or Resale), they could remain on issue indefinitely. Holders
have no right to request or require an Exchange.
It is expected that the Notes will be quoted on ASX. Unless an Exchange
occurs, Holders would need to sell their Notes on ASX at the prevailing
market price to realise their investment. That market price may be less than
the Face Value, or there may be no liquid market in the Notes which may
result in the Holders suffering a loss.
Sections 2.2 – 2.5
1.2 SUMMARY OF CERTAIN EVENTS THAT MAY OCCUR WHILE THE
ANZ CAPITAL NOTES 7 ARE ON ISSUE
The diagram and table below summarise certain events that may occur while the ANZ Capital Notes 7 are on issue, and
what Holders may receive if those events occur. The events depend on a number of factors including ANZ’s share price,
the occurrence of contingencies and in some cases election by ANZ. As a result the events may not occur.
Approximately 7 Years
If ANZ chooses, and certain conditions
are met, Notes will be Converted,
Redeemed or Resold on this date
There are certain other events that could occur at any time which may result in Notes being Converted,
Redeemed, Resold or Written O. These are summarised in the table on the next page.
If the Mandatory Conversion
Conditions are met, Notes
will be Converted on this date
2 Years6 Months
Issue
Date
24 March
2022
20 March
2029
20 June
2029
20 September
2029
20 September
2031
Mandatory
Conversion
Date
Optional Exchange
Dates
Potentially
perpetual
1.1 KEY FEATURES OF THE OFFER AND ANZ CAPITAL NOTES 7 (CONT)
5 Due to the Business Day convention, the Mandatory Conversion Date is deferred from 20 September 2031 to 22 September 2031.
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What can
happen?
When does this happen?Is APRA
approval
needed?
6

Do
conditions
apply?
What value will you
receive for each Note
if this happens?
In what form will
that value be
provided?
Mandatory
Conversion
On 20 September 2031
7
(if the Mandatory
Conversion Conditions
are satisfied on that date)
or the first Distribution
Payment Date after that
date on which the
Mandatory Conversion
Conditions are satisfied
NoYesApproximately $101
8
Variable number
of Ordinary Shares
Optional
Conversion
20 March 2029,
20 June 2029 or
20 September 2029
YesYesApproximately $101
8
Variable number
of Ordinary Shares
Optional
Redemption
20 March 2029,
20 June 2029 or
20 September 2029
YesYes$100Cash
Optional Resale20 March 2029,
20 June 2029 or
20 September 2029
YesNo$100Cash
Conversion
in other
circumstances
If a Tax Event or
Regulatory Event occurs
YesYesApproximately $101
8, 9
Variable number
of Ordinary Shares
If a Change of
Control Event occurs
NoYesApproximately $101
8, 9
Variable number
of Ordinary Shares
If a Trigger Event occursNoNoDepending on the
market price of the
Ordinary Shares,
Holders are likely to
receive significantly less
than approximately
$101
10 , 11 , 12
Variable number
of Ordinary Shares,
capped at the
Maximum
Conversion
Number
12
Redemption
in other
circumstances
If a Tax Event or
Regulatory Event occurs
YesYes$100
8
Cash
Resale in other
circumstances
If a Tax Event or
Regulatory Event occurs
YesNo$100
8
Cash
6 Holders should not expect that APRA’s approval will be given if requested.
7 Due to the Business Day convention, the Mandatory Conversion Date is deferred from 20 September 2031 to 22 September 2031.
8 On the basis of the Conversion calculations, the value of Ordinary Shares received on Conversion may be worth more or less than approximately $101.
The number of Ordinary Shares that Holders will receive will not be greater than the Maximum Conversion Number.
9 If an Exchange occurs on a day that is not a scheduled quarterly Distribution Payment Date, Holders whose Notes are being Exchanged will also receive a
Distribution in respect of these Notes for the period from the immediately preceding Distribution Payment Date to (but excluding) the date on which the
Exchange occurs (at ANZ’s discretion and provided the conditions to payment are met).
10 Section 6.1.9 provides further detail on the circumstances in which Holders are likely to receive significantly less than $101 following Conversion due to
a Trigger Event.
11 If a Note is Written Off, that Note will not be Converted or Exchanged, all rights (including to Distributions) in respect of that Note will be terminated, and the
Holder will not have their capital repaid.
12 However, if the Notes are not Converted for any reason (including an Inability Event) into Ordinary Shares within 5 Business Days after a Trigger Event Conversion
Date, the Notes will be Written Off, meaning the Notes will never Convert or be Exchanged, all rights (including to Distributions) in respect of the Notes will be
terminated and the Holder will not have their capital repaid.
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1.3 RANKING OF NOTES IN A WINDING-UP OF ANZ
The table below illustrates how the Notes would rank upon a winding-up of ANZ, if they are on issue at the time. In the
table, a ‘higher ranking’ obligation is one which will be paid out of ANZ’s available assets in a winding-up before obligations
with a lower ranking. It may be that lower ranking securityholders, including Holders, will only have part or none of their
obligations paid (in the case of Holders, the claim for the Face Value), as there may be insufficient assets remaining to do
so after higher ranking obligations have been paid.
As shown in the table below, in a winding-up of ANZ, the Notes rank ahead of Ordinary Shares, equally among
themselves, equally with Equal Ranking Instruments (including ANZ Capital Securities) and behind all Senior Creditors
of ANZ, including depositors.
ExamplesExamples of existing ANZ obligations and securities
13
Higher ranking/
earlier priority
Senior creditorsLiabilities preferred by
law and secured debt
Liabilities in Australia in relation to protected accounts
under the Banking Act (generally, savings accounts and
term deposits) and other liabilities preferred by law
including employee entitlements and secured creditors
Unsubordinated
unsecured debt
Bonds and notes, trade and general creditors. This
includes covered bonds which are an unsecured claim
on ANZ, though they are secured over assets that form
part of the Group
Subordinated
unsecured debt
Subordinated unsecured debt obligations
Equal ranking
obligations
Preference shares and
other equally ranked
instruments
ANZ Capital Notes 7 and ANZ Capital Securities
(in each case if they have not been exchanged for
Ordinary Shares)
Where Notes are Exchanged for Ordinary Shares,
Holders have the claims of holders of Ordinary Shares.
If, following a Trigger Event, Notes are Written Off,
Holders have no claim at all on ANZ, and they are likely
to be worse off than holders of Ordinary Shares
Lower ranking/
later priority
Lower ranking
obligations
Ordinary SharesOrdinary Shares
13 This is a very simplified capital structure of ANZ and does not include every type of security or other obligation issued by ANZ. ANZ has the right to issue further
debt, deposits or other obligations or securities of any kind at any time. ANZ Capital Notes 7 do not limit the amount of senior debt, deposits or other obligations
or securities that may be incurred or issued by ANZ at any time.
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14 This is subject to a limit, currently fixed at $250,000 for the aggregate of the customer’s accounts with an ADI declared subject to the Financial Claims Scheme.
15 Due to the Business Day convention, the Mandatory Conversion Date is deferred from 20 September 2031 to 22 September 2031.
1.4 DIFFERENCES BETWEEN THE NOTES AND OTHER TYPES OF
INVESTMENTS IN ANZ
ANZ Capital Notes 7 are different from and higher risk than term deposits. They are also different from ANZ Capital Securities
(including CN2 and CN6) and Ordinary Shares. You should consider these differences in light of your investment objectives,
financial situation and particular needs (including financial and taxation issues) before deciding to apply for Notes. A table
highlighting the key differences between the Notes and CN2 is set out in Section 3.2.
Term depositCN6ANZ Capital Notes 7Ordinary Shares
Protected under the
Financial Claims Scheme
Yes
14
NoNoNo
MarginVaries from
product to
product
3.00%2.7% to 2.9%, to be
determined under
the Bookbuild
N/A
Distribution/
dividend rate
FixedFloatingFloatingVariable – as
determined by ANZ
Distribution/dividend
payment dates
Often at the
end of term or
per annum
QuarterlyQuarterlyGenerally half-yearly
– as determined by
ANZ in its absolute
discretion
Conditions to payment
of distributions/
dividends
None, subject
to applicable
laws and any
specific
conditions
Yes, subject to ANZ’s
absolute discretion and
payment conditions
Yes, subject to ANZ’s
absolute discretion and
Payment Conditions
Yes, subject to ANZ’s
absolute discretion
and applicable laws
and regulations
Distribution/dividend
restriction if
distribution/dividend
not paid
NoYes, applies to Ordinary
Shares until the next
quarterly distribution
payment date
Yes, applies to Ordinary
Shares until the next
quarterly Distribution
Payment Date
No
Frankable distribution/
dividend
No – interest
payments are
not franked
Frankable and grossed
up for a non franked
portion
Frankable and grossed
up for a non franked
portion
Frankable
Quoted on ASXNoYes, quoted as “ANZPI”Yes, ANZ Capital Notes 7
are expected to be
quoted as “ANZPJ”
Yes – quoted as “ANZ”
Te r mOften between
1 month and
5 years
Perpetual, subject to
mandatory conversion
into Ordinary Shares on
20 September 2030
(approximately 9.25
years after its issue date)
Perpetual, subject to
Mandatory Conversion
into Ordinary Shares on
20 September 2031
15
(approximately 9.5 years
after the Issue Date)
Perpetual
Mandatory conversion
into Ordinary Shares
NoYesYesN/A
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Term depositCN6ANZ Capital Notes 7Ordinary Shares
APRA written approval
required for conversion,
redemption or resale
(if applicable)
N/AYes
16
Yes
17
N/A
ANZ’s early
conversion option
NoYesYes
See Section 2.3
N/A
ANZ’s early
redemption option
NoYesYes
See Section 2.3
No
ANZ’s resale rightsNoYesYes
See Section 2.3
No
Other ANZ early
redemption options
NoYesYes
See Section 2.3
No
Trigger EventNoYesYes
See Section 2.5
N/A
Voting rightsN/ANo right to vote
at general meeting
of holders of
Ordinary Shares
No right to vote
at general meeting
of holders of
Ordinary Shares
Right to vote
at general meeting
of holders of
Ordinary Shares
RankingRefer to Section 1.3
1.5 KEY RISKS OF ANZ CAPITAL NOTES 7
Before deciding whether to apply for Notes, you should consider whether the Notes are a suitable investment for you.
There are risks associated with investing in Notes and in ANZ. Many of those risks are outside the control of ANZ and
its Directors. The key risks are detailed in Section 6 and you should read that section in full before deciding to invest.
The table below outlines the key risks associated with an investment in the Notes.
TopicSummaryWhere to find
more information
ANZ Capital
Notes 7 are not
deposit
liabilities or
protected
accounts
ANZ Capital Notes 7 are not deposit liabilities of ANZ, are not protected accounts
for the purposes of the Banking Act or any other accounts with ANZ and are not
guaranteed or insured by any person.
Section 6.1.14
Financial
market
conditions
and liquidity
of Notes
The market price of the Notes may move up or down due to various factors
that affect financial market conditions. It is possible that the Notes may trade at
a market price below their Face Value of $100. This means that Holders who seek
to sell their Notes at that time may do so at a loss.
The liquidity of the Notes may be low and the market for the Notes may be
volatile. This means that Holders may not be able to sell their Notes at an
acceptable price, at or above Face Value or at all. The market for the Notes
may be less liquid and/or more volatile than the market for Ordinary Shares
or other securities issued by ANZ or other entities.
Sections 6.1.1
and 6.1.2
16 Except for conversion on a mandatory conversion date, common equity capital trigger event, non-viability trigger event or change of control event
(each as defined in the CN6 terms).
17 Except for Conversion on a Mandatory Conversion Date, Common Equity Capital Trigger Event, Non-Viability Trigger Event or Change of Control Event.
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18 Due to the Business Day convention, the Mandatory Conversion Date is deferred from 20 September 2031 to 22 September 2031.
19 Due to the Business Day convention, the Mandatory Conversion Date is deferred from 20 September 2031 to 22 September 2031.
TopicSummaryWhere to find
more information
Distributions
may not
be paid
There is a risk that Distributions may not be paid.
If a Distribution is not paid in full on a Distribution Payment Date, Holders have
no claim or entitlement in respect of non-payment nor any right to receive that
Distribution at any later time. Non-payment is not an event of default.
Section 6.1.5
Changes in
Distribution
Rate
The Distribution Rate will move up or down over time as a result of movements in
the BBSW Rate. There is a risk that the Distribution Rate may become less attractive
when compared to the rates of return available on other investments.
Section 6.1.7
Mandatory
Conversion
may not occur
on the
Mandatory
Conversion
Date
ANZ Capital Notes 7 have no fixed maturity date but will Convert into Ordinary
Shares on 20 September 2031
18
if the Mandatory Conversion Conditions are
satisfied, unless Notes are otherwise Exchanged on or before that date.
If these conditions are not met on 20 September 2031,
19
Conversion will occur
on the next Distribution Payment Date on which they are satisfied. There is a risk
that Conversion will not occur because the Mandatory Conversion Conditions
are not satisfied.
If the Mandatory Conversion Conditions are never satisfied there is a risk that
the Notes may never Convert and could remain on issue indefinitely.
Sections 2.2.2
and 6.1.8
Holders have
no right to
request early
Exchange
Holders have no right to request that their Notes be Exchanged. Unless their
Notes are Exchanged, to realise their investment, Holders would need to sell
their Notes on the ASX at the prevailing market price. That price may be less than
the Face Value, and there may be no liquid market in the Notes. The Note Terms
contain no events of default.
Section 6.1.10
Mandatory
Conversion
or Write Off
following a
Trigger Event
If a Trigger Event occurs and Notes are Converted, the number of Ordinary Shares
a Holder will receive for each Note is limited to the Maximum Conversion Number.
This means that, depending on the market price of Ordinary Shares at the time,
Holders are likely to receive significantly less than approximately $101 worth of
Ordinary Shares per Note and to suffer loss as a consequence. Where Conversion
is not effected within five Business Days after the Trigger Event Conversion Date
for any reason (including an Inability Event), the Notes will be Written Off. This
means that those Notes will never Convert or be Exchanged and all rights
(including to Distributions and to Face Value in respect of those Notes) will be
terminated with effect on and from the Trigger Event Conversion Date. A Holder’s
investment will lose all of its value, they will not have their capital repaid and they
will not receive any compensation.
A Trigger Event may occur at any time.
Sections 2.5
and 6.1.9
Ranking in a
winding-up
of ANZ
On a winding-up of ANZ, the Notes rank for payment ahead of Ordinary Shares,
equally among themselves, equally with Equal Ranking Instruments (including
ANZ Capital Securities), and behind all Senior Creditors, including depositors.
This means that, on a winding-up, there is a risk that Holders will lose all or some
of their investment. If the Notes have been Converted into Ordinary Shares prior
to a winding-up of ANZ, the Ordinary Shares received on Conversion will rank
equally with other Ordinary Shares and a holder's claim in a winding-up of ANZ
will therefore rank lower than it would have if the Notes had not been Converted.
If Notes are Written Off, those Notes will never Convert or be Exchanged and
Holders will not have their capital repaid at all.
Section 6.1.14
ANZ may
issue further
securities
There is no limit on the amount of senior debt, deposits or other obligations or
securities that may be incurred or issued by ANZ at any time, which may affect
a Holder’s ability to be repaid on a winding-up of ANZ.
Section 6.1.19
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TopicSummaryWhere to find
more information
Fluctuation
in Ordinary
Share price
The market price of Ordinary Shares will move up or down due to various factors,
including investor perceptions, domestic and worldwide economic conditions,
ANZ’s financial performance and position, and transactions affecting the share
capital of ANZ. As a result, the price used to calculate the number of Ordinary
Shares received by Holders upon Conversion may be different to the market
price of the Ordinary Shares when they are issued or thereafter.
The COVID-19 pandemic has, and will likely continue to, severely impact global,
regional and national economies and markets. The expected duration and
magnitude of the COVID-19 pandemic and its potential impacts on the economy
and the market price for Ordinary Shares are unclear.
Sections 6.1.2,
6.1.4 and 6.1.8
ANZ’s financial
performance
and position
The market price of the Notes (and the Ordinary Shares into which they
can Convert) may be affected by ANZ’s financial performance and position.
For specific risks associated with an investment in ANZ, see Section 6.2.
ANZ’s financial performance and position may also affect the credit ratings
associated with ANZ’s securities, which may impact the market price and liquidity
of the Notes. ANZ’s credit rating may be revised, withdrawn or suspended by
ratings agencies at any time.
Section 6.2
1.6 WHAT IS THE OFFER AND HOW DO I APPLY?
TopicSummaryWhere to find
more information
Notes Target
Market
ANZ has made a target market determination for ANZ Capital Notes 7 in
accordance with its obligations under the DDO Regime (Target Market
Determination).
The Target Market Determination describes, among other things, the class
of Retail Investors that comprise the target market for ANZ Capital Notes 7
(Notes Target Market).
That Notes Target Market is set out in Section 4 and a copy of the Target Market
Determination is available at capitalnotes.anz.com.
If you are a Retail Investor and wish to apply for Notes:
•you must seek professional advice as to whether you are within the Notes Target
Market and whether the investment in the Notes is suitable in light of your
particular objectives, financial situation and needs; and
•you can only apply for the Notes if you are within the Notes Target Market and
have received such advice.
Section 4
Offer StructureThe Offer comprises:
•a Reinvestment Offer;
•a New Money Offer; and
•an Institutional Offer.
Information about the different types of offers and how to apply is set out
in Section 3 and Section 4.
Sections 3 and 4
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TopicSummaryWhere to find
more information
Reinvestment
Offer
On 15 February 2022, ANZ issued a redemption notice in accordance with the
CN2 terms. That notice confirms that on 24 March 2022, ANZ will redeem all CN2
for their face value of $100 per CN2 (CN2 Redemption Price).
The Reinvestment Offer provides Eligible CN2 Holders with the opportunity to
reinvest some or all of their CN2 Redemption Proceeds into ANZ Capital Notes 7.
Eligible CN2 Holders can also apply for additional Notes under the New Money Offer.
For information on the Reinvestment Offer, including the options available to
Eligible CN2 Holders, see Section 3. All Applications for the Reinvestment Offer
must be submitted through a Syndicate Broker.
Section 3
Final CN2
Distribution
The Final CN2 Distribution of $1.1403 per CN2 is scheduled to be paid on all
CN2 on 24 March 2022.
If you hold CN2 on the record date for the Final CN2 Distribution (which is 7.00pm
on 16 March 2022), then you will receive the Final CN2 Distribution irrespective of
whether you are participating in the Reinvestment Offer or not (subject to the
payment conditions in the CN2 terms and ANZ's absolute discretion).
Section 3.1.7
How to ApplyYou can only apply for Notes through a Syndicate Broker. See Sections 3 and
4 for further details.
Sections 3 and 4
Minimum
Application
Your Application must be for a minimum of 50 Notes ($5,000).
If you are an Eligible CN2 Holder and own less than 50 CN2, you can still apply for
Notes under the Reinvestment Offer but you must apply to reinvest all of your CN2.
Sections 3 and 4
Allocation
policy
•Allocations to Institutional Investors will be determined by ANZ and
ANZ Securities following completion of the Bookbuild.
•Allocations to Syndicate Brokers will be determined by ANZ in consultation
with the Joint Lead Managers following completion of the Bookbuild.
•Allocations to applicants by a Syndicate Broker (including in respect of
Applications under the Reinvestment Offer) are at the discretion of that
Syndicate Broker. It is possible for Applications to be scaled back by a Syndicate
Broker. ANZ takes no responsibility for any allocation, scale back or rejection
that is decided by a Syndicate Broker.
Section 4.4.3
More
information
If you have any questions about the Offer or how to apply for the Notes, please call the
ANZ Information Line on 1800 113 399 (within Australia) or +61 3 9415 4010 (international)
(Monday to Friday – 8:30am to 5:30pm) or contact your Syndicate Broker or other professional
adviser who is licensed by ASIC to give such advice.
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THIS SECTION IS AN OVERVIEW OF THE
KEY FEATURES OF ANZ CAPITAL NOTES 7.
WHERE INDICATED, MORE DETAILED
INFORMATION IS PROVIDED IN OTHER
SECTIONS OF THIS PROSPECTUS AND
THE NOTE TERMS.
IF YOU WISH TO APPLY FOR NOTES, IT IS
IMPORTANT THAT YOU FIRST READ THIS
PROSPECTUS (INCLUDING THE NOTES
TARGET MARKET) IN FULL. IF YOU HAVE
ANY QUESTIONS ABOUT THE OFFER, THE
NOTES OR THE NOTES TARGET MARKET,
YOU SHOULD CONTACT YOUR SYNDICATE
BROKER OR SEEK ADVICE FROM A
PROFESSIONAL ADVISER WHO IS LICENSED
BY ASIC TO GIVE THAT ADVICE.
02
SECTION 02
ABOUT
ANZ CAPITAL
NOTES 7
« CONTENTS
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Investment Overview
About the Reinvestment Oer
16
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KEY QUESTIONS ABOUT ANZ CAPITAL NOTES 7
2.1. Distributions
2.1.1. How will the Distribution Rate be calculated?
2.1.2. How will the Distribution be calculated for each Distribution Period?
2.1.3. What is the impact of franking credits?
2.1.4. What is the BBSW Rate?
2.1.5. When are the Distribution Payment Dates?
2.1.6. What are the Payment Conditions?
2.1.7. What is the Distribution Restriction and when will it apply?
2.1.8. Are any deductions made on the Distributions?
2.1.9. How will Distributions be paid?
2.2. Mandatory Conversion
2.2.1. When is the Mandatory Conversion Date?
2.2.2. What are the Mandatory Conversion Conditions?
2.2.3. What are the reasons for the Mandatory Conversion Conditions?
2.2.4. Until when is Mandatory Conversion deferred if the Mandatory Conversion Conditions are not satisfied?
2.2.5. How many Ordinary Shares will Holders receive on Mandatory Conversion?
2.2.6. What is the Issue Date VWAP?
2.2.7. What adjustments to the Issue Date VWAP are made to account for changes to ANZ's capital and what is their effect?
2.3. Optional Exchange by ANZ
2.3.1. What does Exchange mean?
2.3.2. When are the Optional Exchange Dates?
2.3.3. What is a Tax Event?
2.3.4. What is a Regulatory Event?
2.3.5. Are there restrictions on which Exchange Method ANZ may choose?
2.3.6. What are the conditions or restrictions on Conversion as the Exchange Method?
2.3.7. How many Ordinary Shares will Holders receive if Conversion is the Exchange Method?
2.3.8. Are there any restrictions on Redemption?
2.3.9. What happens on Resale?
2.3.10. What factors will influence ANZ's decision to Exchange the Notes?
2.3.11. Can Holders request Exchange?
2.3.12. Purchases
2.4. Conversion following a Change of Control Event
2.4.1. When will a Change of Control Event occur?
2.4.2. What happens on a Change of Control Event?
2.4.3. What are the restrictions on Conversion on a Change of Control Conversion Date?
2.4.4. What happens if Conversion does not occur on a Change of Control Conversion Date?
2.5. Automatic conversion following a Trigger Event
2.5.1. What is a Trigger Event?
2.5.2. What happens following a Trigger Event?
2.5.3. How many Ordinary Shares will Holders receive if Notes are Converted on a Trigger Event Conversion Date?
2.5.4. What is the Maximum Conversion Number?
2.5.5. Is there a worked example illustrating how many Ordinary Shares a Holder will receive on Conversion
following a Trigger Event?
2.5.6. How many Notes need to be Converted or Written Off on the occurrence of a Trigger Event?
2.6. Other
2.6.1. Can ANZ issue further Notes or other instruments?
2.6.2. What voting rights do Notes carry?
2.6.3. Can ANZ amend the Note Terms?
2.6.4. What is an Approved NOHC Event?
2.6.5. What is the ANZ Capital Notes 7 Deed Poll?
2.6.6. What if a Holder is not resident in Australia?
2.6.7. What happens if FATCA Withholding is required to be made?
2.6.8. Where Ordinary Shares are issued to a nominee, does the nominee or ANZ have any duties on a sale?
2.6.9. Is there a time limit on claims in respect of the Notes?
2.6.10. Are determinations by ANZ binding?
2.6.11. Does set-off apply to payments in respect of the Notes?
2.6.12. What is the power of attorney?
2.6.13. What are the tax implications of investing in the Notes?
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TopicSummaryWhere to find
more information
2.1 DISTRIBUTIONS
ANZ Capital Notes 7 are expected to pay quarterly floating rate non-cumulative Distributions, which are expected to be
franked at the same rate as dividends on Ordinary Shares and accordingly Holders are expected to receive a combination
of cash Distributions and franking credits until all Notes are Converted, Redeemed or Written Off. Payment of the
Distributions is at ANZ’s discretion and subject to the payment not resulting in ANZ breaching APRA’s capital adequacy
requirements or becoming (or being likely to become) insolvent, or APRA objecting to the payment (the Payment
Conditions). The Payment Conditions are described in Section 2.1.6 below.
Distributions on Notes are based on a floating rate and are non-cumulative. This means that if a Distribution or part of a
Distribution is not paid on a Distribution Payment Date, Holders have no claim or entitlement in respect of non-payment
nor any right to receive that Distribution at any later time. All payments of Distributions are subject to applicable law.
2.1.1
How will the
Distribution Rate
be calculated?
The Distribution Rate for each Distribution Period will be set on the first
Business Day of each Distribution Period and will be calculated using the
following formula:
Distribution Rate = (BBSW Rate + Margin) x (1 – Tax Rate) where:
BBSW Rate means the BBSW Rate on the first Business Day of the
Distribution Period – see Section 2.1.4;
Margin is the margin determined under the Bookbuild
(expected to be in the range of 2.7% to 2.9%); and
Tax Rate is the Australian corporate tax rate applicable to the franking
account of ANZ as at the relevant Distribution Payment Date. As at the date
of this Prospectus, the Tax Rate is 30%, although the Tax Rate may change
in future years – see Section 6.1.17.
For example, assuming the BBSW Rate on the first Business Day of the
Distribution Period is 0.07% per annum and assuming the Margin is 2.70%
per annum, then the Distribution Rate for that Distribution Period would
be calculated as follows:
BBSW Rate 0.0700% per annum
Plus the Margin + 2.7000% per annum
Equivalent unfranked distribution rate 2.7700% per annum
Multiplied by (1 – Tax Rate) x 0.70
Indicative Distribution Rate 1.9390% per annum
Clause 3.1 of
the Note Terms
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2.1 DISTRIBUTIONS (CONT)
2.1.2
How will the
Distribution be
calculated for each
Distribution Period?
Distributions scheduled to be paid on each Distribution Payment
Date will be calculated using the following formula:
Distribution = Face Value x Distribution Rate × N
365
where:
Face Value means $100 per Note;
Distribution Rate means the rate (expressed as a percentage per annum)
calculated as set out in Section 2.1.1; and
N means the number of days in the Distribution Period calculated as
set out in the Note Terms.
For example, if the Distribution Rate was 1.9390% per annum and assuming
Distributions on the Notes are fully franked, then the cash Distribution on
each Note for that Distribution Period (if the Distribution Period was for
91 days) would be calculated as follows:
Indicative Distribution Rate 1.9390% per annum
Multiplied by the Face Value x $100.00
Multiplied by the number of days
in the Distribution Period
20
x 91
Divided by 365 ÷ 365
Indicative fully franked cash Distribution
payment for the Distribution Period per Note $0.4834
Where Distributions are not fully franked, an additional cash payment
is made to compensate for the unfranked component. Details of the
additional payment are set out in Section 2.1.3.
The above example is for illustrative purposes only. Actual Distributions
may be higher or lower than this example.
The Distribution Rate for the first Distribution Period will be set on the
Issue Date and will include the Margin determined under the Bookbuild.
You should note that the Distribution Period for the first Distribution is
a shorter period of 88 days and Distribution Periods will otherwise
generally be 90 to 92 days.
Clauses 3.1, 13
and 17.2 of the
Note Terms
20 Distribution Periods will otherwise generally contain 90 to 92 days.
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2.1 DISTRIBUTIONS (CONT)
2.1.3
What is the impact
of franking credits?
Distributions are expected to be franked at the same rate as dividends
on Ordinary Shares and, accordingly, Holders are expected to receive
a combination of cash Distributions and franking credits. ANZ currently
franks Ordinary Shares at 100%. The level of franking may vary over time
and Distributions may be partially, fully or not franked.
If the potential value of the franking credits is taken into account in full,
the Distribution Rate of 1.9390% per annum in the example in Section 2.1.2
would be equivalent to an unfranked distribution rate of approximately
2.7700% per annum.
If any Distribution is not franked or only partially franked, the amount
of the cash Distribution will be increased to compensate for the unfranked
component, subject to the Payment Conditions. Clause 3.2 of the Note Terms
sets out the method of calculation for the additional payment.
For example, if the franking rate applicable to the Distribution was only 90%,
then the cash Distribution on each Note for that Distribution Period (if the
Distribution Period was for 91 days) would be calculated as follows:
Indicative Distribution Rate 1.9390% per annum
Multiplied by the Face Value x $100.00
Multiplied by the number of days
in the Distribution Period
21
x 91
Divided by 365 ÷ 365
Sub total $0.4834
Divided by 1 – (Tax Rate x (1 – Franking Rate)) 0.97
Indicative partially franked cash Distribution
payment for the Distribution Period per Note $0.4984
The above example is for illustrative purposes only. Actual Distributions
may be higher or lower than this example.
Holders should be aware that the potential value of any franking credits does
not accrue at the same time as the receipt of any cash Distribution and will
depend on the individual tax position of each Holder and the tax rules that
apply at the time of each Distribution.
If the corporate tax rate applicable to ANZ were to change, the cash amount
of Distributions and the amount of any franking credits would change. For
instance, if the tax rate decreases the cash amount of any Distribution ANZ
may pay would increase and the franking credits attached to that Distribution
would decrease.
The laws relating to the availability of franking and franking credits may
change. Holders should refer to the Taxation Summary in Section 7 and
seek professional advice in relation to their tax position.
Sections 6.1.6
and 6.1.17
Clause 3.2
of the Note Terms
21 Distribution periods will otherwise generally contain 90 to 92 days.
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2.1 DISTRIBUTIONS (CONT)
2.1.4
What is the
BBSW Rate?
The BBSW Rate is a benchmark 3 month floating interest rate for the Australian
money market. It is used as a reference for the pricing, rate-setting and valuation
of Australian dollar financial securities and is administered by ASX and is
published on various information services. It changes to reflect supply and
demand in the cash and currency markets. The BBSW Rate for each Distribution
Period is set on the first Business Day of the relevant Distribution Period.
The graph below illustrates the movement in the BBSW Rate over
the last 15 years. The rate on 2 February 2022 was 0.0700% per annum.
3 Month BBSW Rate
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
5.5
6
6.5
7
7.5
8
8.5
9
BBSW Bill Rate
% per annum
Jan
20 06
Jan
20 07
Jan
20 08
Jan
20 09
Jan
20 10
Jan
20 11
Jan
20 12
Jan
20 13
Jan
20 14
Jan
20 15
Jan
20 16
Jan
20 17
Jan
20 18
Jan
20 19
Jan
20 20
Jan
20 21
Jan
20 22
The above graph is for illustrative purposes only and does not indicate,
guarantee or forecast the actual BBSW Rate. The actual BBSW Rate for the
first and subsequent Distribution Periods may be higher or lower than the
rates in the above graph.
If ANZ determines that BBSW has been affected by a “Reference Rate
Disruption Event”, ANZ may select an alternative reference rate that it
considers appropriate and make other related changes to the Terms (subject,
in each case, to APRA’s prior written approval). Broadly, a “Reference Rate
Disruption Event” occurs where BBSW has been discontinued or has ceased to
be generally accepted in the Australian market for securities such as the Notes.
ANZ is required to act in good faith and in a commercially reasonable manner
in selecting an alternative reference rate, and may consult with sources that it
considers appropriate, but may otherwise exercise its discretion.
It is possible for BBSW to become negative. If BBSW becomes negative, the
negative amount will be taken into account in calculating the Distribution Rate.
If the Distribution Rate was negative as a result, Holders would not receive a
distribution and there would be no obligation on Holders to pay ANZ. For
example, if the BBSW Rate is negative 1.00% per annum, the Margin is 2.7000%
per annum and the Australian corporate tax rate is 30%, then the Distribution
Rate will be 1.1900% per annum, calculated as follows:
Distribution Rate = (-1.00% + 2.7000%) x (1 – 30%) = 1.1900%
The above example is for illustrative purposes only. Actual Distributions
may be higher or lower than this example.
Clause 3.1 of
the Note Terms
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2.1 DISTRIBUTIONS (CONT)
2.1.5
When are the
Distribution
Payment Dates?
Subject to ANZ’s absolute discretion and the Payment Conditions,
Distributions are payable quarterly in arrears on the Distribution Payment
Dates. The first Distribution Payment Date is 20 June 2022.
Subsequent Distribution Payment Dates occur on 20 March, 20 June,
20 September and 20 December each year. If any of these dates are not
Business Days, then the Distribution Payment Date will occur on the next
Business Day.
In addition, if Exchange occurs on a day that is not a scheduled Distribution
Payment Date (other than an Exchange as a result of a Trigger Event, in which
case all rights to payment of Distributions are terminated), Holders whose
Notes are being Exchanged will also receive a Distribution in respect of those
Notes for the period from the immediately preceding Distribution Payment
Date to (but excluding) the date on which Exchange occurs, subject to ANZ’s
absolute discretion and the Payment Conditions.
Clauses 3.3, 3.5
and 17.2 of the
Note Terms
2.1.6
What are
the Payment
Conditions?
Distributions may not always be paid. The payment of each Distribution
is subject to ANZ’s absolute discretion and no Payment Condition existing
in respect of the relevant Distribution Payment Date.
A Payment Condition will exist where:
• the payment of Distributions will result in ANZ (on a Level 1 basis) or
the ANZ Group (on a Level 2 basis or, if applicable, a Level 3 basis) not
complying with APRA’s then current capital adequacy requirements;
•the payment of Distributions would result in ANZ becoming, or being
likely to become, insolvent for the purposes of the Corporations Act; or
•APRA objects to the payment of the Distribution.
All payments are subject to applicable law.
Clauses 3.3, 13.9
and 17.2 of the
Note Terms
2.1.7
What is the
Distribution
Restriction and
when will it apply?
If for any reason a Distribution has not been paid in full on a Distribution
Payment Date (the Relevant Distribution Payment Date), ANZ must not,
subject to certain exceptions, without approval of a Special Resolution,
until and including the next quarterly Distribution Payment Date:
•resolve to pay or pay any Ordinary Share Dividend; or
•undertake any Buy-Back (as defined in the Note Terms) or Capital Reduction,
unless the Distribution is paid in full within 3 Business Days of the Relevant
Distribution Payment Date.
Clauses 3.7 and
3.8 of the Note
Terms
2.1.8
Are any deductions
made on the
Distributions?
ANZ may deduct from any Distribution payable in accordance with the
Note Terms the amount of any tax required by law to be deducted in respect
of such amount.
ANZ may also make a deduction on account of FATCA and is not required
to pay an additional amount (or take any further action) where it has made
a deduction on account of tax or FATCA.
Clauses 13.10 and
13.11 of the Note
Terms
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2.1 DISTRIBUTIONS (CONT)
2.1.9
How will
Distributions
be paid?
Distributions are scheduled to be paid to Holders whose details are
recorded with the Registry on the relevant Record Date (as defined
in the Note Terms).
Distributions and any other amount payable will be paid by:
•electronic transfer to an Australian dollar bank account maintained
in Australia with a financial institution nominated by the Holder; or
•at ANZ’s option, if no such account is nominated, sending a cheque
to the address of the Holder.
In order to receive a payment, a Holder will need to notify the Registry by
close of business on the relevant Record Date (as defined in the Note Terms)
of an Australian dollar bank account maintained in Australia with a financial
institution to which payment should be made. If the Holder does not so notify
the Registry, or the payment does not complete, the amount will be held as a
non-interest bearing deposit until such account is nominated, claims may no
longer be made in respect of that amount or ANZ deals with the amount in
accordance with the laws relating to unclaimed moneys.
Clause 13 of the
Note Terms
2.2 MANDATORY CONVERSION
ANZ Capital Notes 7 do not have a maturity date but are scheduled to be Converted into Ordinary Shares on
20 September 2031
22
if the Notes have not been Exchanged prior to that date, provided that certain conditions are met.
These conditions may never be satisfied and therefore Notes may never Convert into Ordinary Shares.
2.2.1
When is the
Mandatory
Conversion Date?
The Mandatory Conversion Date is 20 September 2031
23
or if the Mandatory
Conversion Conditions are not satisfied on that date, the first Distribution
Payment Date on which the Mandatory Conversion Conditions are satisfied.
Clause 4.2 of the
Note Terms
22 Due to the Business Day convention, the Mandatory Conversion Date is deferred from 20 September 2031 to 22 September 2031.
23 Due to the Business Day convention, the Mandatory Conversion Date is deferred from 20 September 2031 to 22 September 2031.
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2.2 MANDATORY CONVERSION (CONT)
2.2.2
What are the
Mandatory
Conversion
Conditions?
Conversion will not occur unless all the Mandatory Conversion Conditions
are satisfied.
The Mandatory Conversion Conditions are:
•First Mandatory Conversion Condition: the VWAP on the 25th Business
Day before a potential Mandatory Conversion Date is greater than 56.00%
of the Issue Date VWAP.
•Second Mandatory Conversion Condition: the VWAP during the period
of 20 Business Days in which trading in Ordinary Shares took place before
a potential Mandatory Conversion Date is greater than 50.51% of the Issue
Date VWAP.
•Third Mandatory Conversion Condition: no Delisting Event applies to
Ordinary Shares in respect of the possible Mandatory Conversion Date.
Broadly, a Delisting Event occurs when ANZ is delisted, its Ordinary Shares
have been suspended from trading for a certain period, or ANZ is prevented
by applicable law or any other reason from Converting Notes.
The following diagram illustrates the operation of the conditions.
Mandatory
Conversion
Date
Business
Days
prior
to the
Mandatory
Conversion
Date
Note: These dates are subject to adjustments to account for any days where
trading in Ordinary Shares does not occur.
20 Day VWAP Period
201
025
First
Mandatory
Conversion
Condition
Second
Mandatory
Conversion
Condition
Third
Mandatory
Conversion
Condition
Ordinary Shares
are listed on ASX
VWAP > 50.51% of
Issue Date VWAP
VWAP > 56% of
Issue Date VWAP
Clauses 4.3, 6.1
and 17.2 of the
Note Terms
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2.2 MANDATORY CONVERSION (CONT)
2.2.3
What are the
reasons for
the Mandatory
Conversion
Conditions?
It is intended that upon Mandatory Conversion of a Note, the Holder
receives Ordinary Shares worth approximately $101 that are capable of
being sold on ASX.
There is a cap on the maximum number of shares that Holders can be issued
on conversion of an instrument such as ANZ Capital Notes 7 due to Prudential
Standards and ratings agency requirements. The maximum number is based
on the Issue Date VWAP of Ordinary Shares and, in the case of Mandatory
Conversion, is set by dividing the Face Value of the Notes by 50% of the
Issue Date VWAP.
If the price of Ordinary Shares were to fall significantly and there were no
Mandatory Conversion Conditions, the number of Ordinary Shares that you
would receive might be limited by that cap and in that case the value of
those Ordinary Shares would be likely to be less than $101. In order to give
Holders some protection against receiving Ordinary Shares worth less than
approximately $101, the First and Second Mandatory Conversion Conditions
have been included, so that where the VWAP of Ordinary Shares has fallen
to less than the specified percentage of the Issue Date VWAP, Mandatory
Conversion is deferred.
So that Holders receive Ordinary Shares on Conversion that are capable
of being sold on ASX, the Third Mandatory Conversion Condition has been
included. Essentially, it provides that if Ordinary Shares are not listed,
Mandatory Conversion is deferred.
2.2.4
Until when is
Mandatory
Conversion deferred
if the Mandatory
Conversion
Conditions are
not satisfied?
If any of the Mandatory Conversion Conditions are not satisfied, Mandatory
Conversion is deferred until the next Distribution Payment Date on which all
of the Mandatory Conversion Conditions are satisfied. Since the Mandatory
Conversion Conditions may never be satisfied, Mandatory Conversion may
never occur.
Clauses 4.2 and
4.3 of the Note
Terms
2.2.5
How many
Ordinary Shares
will Holders receive
on Mandatory
Conversion?
If Notes are Converted on the Mandatory Conversion Date, Holders will
receive a number of Ordinary Shares per Note that is equivalent to the
number calculated using the following formula:
Face Value
99% x VWAP
The VWAP for this purpose is the VWAP during the 20 Business Days on which
trading in Ordinary Shares took place before the Mandatory Conversion Date.
In the above calculation there is a small Conversion discount since selling
costs are likely to apply to the sale of Ordinary Shares on ASX.
For example, assuming the VWAP is $27.00, the number of Ordinary Shares
a Holder would receive following Conversion on a Mandatory Conversion
Date would be calculated as follows:
Face Value $100.00
Divided by VWAP x 0.99 ÷ $26.73
Ordinary Shares per Note 3.7411
Assuming the price of those Ordinary Shares on the Mandatory Conversion
Date is also $27.00, the aggregate value of those Ordinary Shares (calculated
by multiplying 3.7411 by $27.00) would be approximately $101.
The above example is for illustrative purposes only. The actual VWAP and
the number of Ordinary Shares Holders might receive on Conversion on the
Mandatory Conversion Date may be higher or lower than in this example.
Clauses 6 and
17.2 of the Note
Terms
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2.2 MANDATORY CONVERSION (CONT)
2.2.6
What is the Issue
Date VWAP?
The Issue Date VWAP is the VWAP during the period of 20 Business Days on
which trading in Ordinary Shares took place immediately preceding (but not
including) the first date on which Notes were issued, subject to certain
adjustments (described in Section 2.2.7 below).
Clause 17.2 of
the Note Terms
2.2.7
What adjustments
to the Issue Date
VWAP are made
to account for
changes to ANZ’s
capital and what
is their effect?
The Issue Date VWAP may be adjusted to reflect a consolidation, division or
reclassification of Ordinary Shares and pro rata bonus issues as set out in the
Note Terms (but not other transactions, including rights issues, which may
affect the capital of ANZ). Since the First Mandatory Conversion Condition
and Second Mandatory Conversion Condition are expressed in terms of
percentages of the Issue Date VWAP, an adjustment alters the VWAP of
Ordinary Shares at which those conditions would be satisfied.
However, no adjustment shall be made to the Issue Date VWAP where such
adjustment (rounded if applicable) would be less than one per cent of the
Issue Date VWAP then in effect.
Clauses 6.2 to 6.8
of the Note Terms
2.3 OPTIONAL EXCHANGE BY ANZ
ANZ Capital Notes 7 have no fixed maturity but ANZ may choose to Exchange all or some ANZ Capital Notes 7 on an
Optional Exchange Date or after a Tax Event or Regulatory Event occurs, in each case if APRA has given its approval and
certain conditions are met. In addition, ANZ (or any Related Entity of ANZ) may at any time purchase Notes in the open
market or otherwise, at any price (subject to the prior written approval of APRA).
2.3.1
What does
Exchange mean?
Exchange means:
•Notes are Converted into a variable number of Ordinary Shares
with a value
24
of approximately $101 per Note;
•Notes are Redeemed for $100 per Note;
•Notes are Resold to a purchaser nominated by ANZ (that cannot
be ANZ or a Related Entity of ANZ) for $100 per Note; or
•a combination of the above.
No Exchange elected by ANZ will occur without APRA’s prior written
approval and unless certain conditions are met.
Holders should not expect that APRA will give its approval for any Exchange.
Clauses 5, 6, 7, 8
and 17.2 of the
Note Terms
2.3.2
When are
the Optional
Exchange Dates?
The Distribution Payment Date falling on 20 March 2029, 20 June 2029 or
20 September 2029.
Clause 17.2 of
the Note Terms
2.3.3
What is a
Tax Event?
Broadly, a Tax Event will occur if ANZ receives professional advice that,
as a result of:
•a change in the tax law in Australia;
•an administrative pronouncement or ruling affecting taxation in Australia; or
•a challenge by a taxing authority in Australia in connection with the Notes,
on or after the Issue Date (and which on the Issue Date was not expected
by ANZ to occur), there is more than an insubstantial risk which the Directors
determine to be unacceptable that ANZ would be exposed to more than a de
minimis adverse tax consequence or increased cost in relation to Notes being
on issue or any Distribution would not be a frankable distribution for
tax purposes.
Clauses 5.1 and
17.2 of the Note
Terms
24 Based on the VWAP during a period, being 20 Business Days, on which trading in Ordinary Shares took place immediately preceding the Exchange Date. The
VWAP of Ordinary Shares during the relevant period before the Exchange Date that is used to calculate the number of Ordinary Shares that Holders receive may
differ from the Ordinary Share price on or after the Exchange Date. This means that the value of Ordinary Shares received may be more or less than anticipated
when they are issued or thereafter.
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2.3 OPTIONAL EXCHANGE BY ANZ (CONT)
2.3.4
What is a
Regulatory Event?
Broadly, a Regulatory Event will occur if:
•ANZ receives legal advice that, as a result of a change of Australian
law or regulation or any statement of APRA on or after the Issue Date
(and which on the Issue Date was not expected by ANZ to occur)
(a Regulatory Change),
−additional requirements (which are more than de minimis) would
be imposed on ANZ; or
−there would be a negative impact on ANZ in relation to Notes
which is more than de minimis,
and which the Directors determine to be unacceptable; or
•the Directors determine that, as a result of a Regulatory Change, ANZ is
not or will not be entitled to treat all Notes as Additional Tier 1 Capital.
Clauses 5.1 and
17.2 of the Note
Terms
2.3.5
Are there
restrictions on
which Exchange
Method ANZ
may choose?
Yes. Please see Sections 2.3.6 and 2.3.8 below. In addition, where there
is an Exchange on an Optional Exchange Date and the Exchange Method is
Conversion, the Exchange Notice must be given no earlier than 25 Business
Days before the Optional Exchange Date. Where the Exchange Method is
Redemption or Resale, the notice period is only 5 Business Days.
Clause 5.2 of the
Note Terms
2.3.6
What are the
conditions or
restrictions on
Conversion as the
Exchange Method?
If ANZ wishes to Exchange Notes by Converting them, there are two types
of restrictions which apply:
•Restrictions on choosing to Convert
ANZ may not choose to Convert Notes if on the second Business Day
before the date on which an Exchange Notice is to be sent:
−the VWAP is less than or equal to 22.50% of the Issue Date VWAP; or
−a Delisting Event has occurred.
•Restrictions on completing the Conversion
If ANZ has sent an Exchange Notice, ANZ must not Convert the Notes
if the Second Mandatory Conversion Condition or the Third Mandatory
Conversion Condition would not be satisfied in respect of the Exchange
Date. This restriction is tested as if the Exchange Date were a possible
Mandatory Conversion Date and as if the Second Mandatory Conversion
Condition referred to 20.21% of the Issue Date VWAP.
If that occurs, ANZ will notify Holders and the Conversion will be deferred
until the next Distribution Payment Date on which the Mandatory
Conversion Conditions would be satisfied.
The percentages used in the above conditions are derived from market
precedents and the cap on the number of Ordinary Shares that are permitted
to be issued in these circumstances under the Prudential Standards and
ratings agency requirements. The cap in the case of Conversion in these
circumstances is set by dividing the Face Value of the Notes by 20% of the
Issue Date VWAP.
Clauses 5.2, 5.4
and 5.5 of the
Note Terms
2.3.7
How many
Ordinary Shares
will Holders receive
if Conversion is the
Exchange Method?
If the Notes are Converted on an Optional Exchange Date or following a Tax
Event or Regulatory Event, Holders will receive a variable number of Ordinary
Shares with a value of approximately $101 (based on a VWAP during a period
of 20 Business Days in which trading in Ordinary Shares took place before the
Conversion date).
Clauses 5 and 6
of the Note Terms
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2.3 OPTIONAL EXCHANGE BY ANZ (CONT)
2.3.8
Are there any
restrictions on
Redemption?
ANZ may only elect to Redeem Notes with APRA’s prior written approval.
ANZ is not permitted to Redeem any Note at any time unless those Notes
being Redeemed are replaced concurrently or beforehand with Tier 1 Capital
of the same or better quality as the Notes and the replacement of the Notes is
done under conditions that are sustainable for ANZ’s income capacity, or APRA
is satisfied that the capital position of the ANZ Level 1 Group, the ANZ Level 2
Group and, if applicable, the ANZ Level 3 Group is well above its minimum
capital requirements after ANZ elects to Redeem the Notes.
Clauses 5.2(c) and
7 of the Note
Terms
2.3.9
What happens
on Resale?
ANZ may only elect to Resell Notes with APRA’s prior written approval.
If ANZ elects for Notes to be Resold, subject to payment by the Purchaser
of the Face Value of those Notes, the Holder’s Notes will be transferred to the
Purchaser on the Exchange Date. If the Purchaser does not pay the Face Value
of any Notes, these Notes will not be transferred and the Holder has no claim
against ANZ as a result of the non-payment.
ANZ may appoint one or more Purchasers for the Resale on such terms as
may be agreed between ANZ and the Purchaser and to the extent that any
such terms may cause the Notes to cease to be Additional Tier 1 Capital,
with the prior written approval of APRA. These may include terms as to:
•the conditions of any Resale;
•the substitution of another entity as Purchaser; and
•the terms (if any) on which any Notes acquired by a Purchaser may
be dealt with.
If ANZ appoints more than one Purchaser in respect of a Resale, all or any
of the Notes held by a Holder which are being Resold may be purchased
by any one or any combination of the Purchasers, as determined by ANZ.
ANZ may not appoint itself or a Related Entity as a Purchaser.
Clause 8 of the
Note Terms
2.3.10
What factors
will influence
ANZ’s decision
to Exchange
the Notes?
ANZ will consider a number of factors when determining whether to
Exchange all or some Notes on an Optional Exchange Date or after a Tax Event
or Regulatory Event occurs. Those factors will include, among other things,
ANZ’s regulatory capital requirements and financial condition at the time, the
market conditions prevailing at the time and the cost to ANZ of replacing the
Notes with another form of Additional Tier 1 Capital.
2.3.11
Can Holders
request Exchange?
Holders do not have a right to request Exchange.Clause 9.10(g) of
the Note Terms
2.3.12
Purchases
ANZ (or any Related Entity of ANZ) may at any time purchase Notes in
the open market or otherwise, at any price (subject to the prior written
approval of APRA).
Clause 5.6 of the
Note Terms
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2.4 CONVERSION FOLLOWING A CHANGE OF CONTROL EVENT
If a Change of Control Event occurs, ANZ must give a notice to Convert all ANZ Capital Notes 7 on issue into
a number of Ordinary Shares.
2.4.1
When will a
Change of Control
Event occur?
Broadly, a Change of Control Event occurs if steps are taken to acquire control
of ANZ by a takeover bid or a scheme of arrangement and certain further
approvals or conditions needed for the acquisition to occur or be
implemented have been met.
Clauses 4.10 and
17.2 of the Note
Terms
2.4.2
What happens
on a Change of
Control Event?
If a Change of Control Event occurs, ANZ must, subject to certain further
restrictions, give a Change of Control Conversion Notice to Convert each
Note into a number of Ordinary Shares with a value of approximately $101
(based on the VWAP during a period, usually 20 Business Days, on which
trading in Ordinary Shares took place immediately preceding (but not
including) the Business Day before the Change of Control Conversion Date).
25
Clauses 4.10 and
17.2 of the Note
Terms
2.4.3
What are the
restrictions on
Conversion on a
Change of Control
Conversion Date?
Following the occurrence of a Change of Control Event, ANZ may not
proceed to Convert Notes if, on the date on which Conversion is to occur
(Change of Control Conversion Date), certain further restrictions apply.
These Conversion restrictions on the Change of Control Conversion
Date apply if the Second Mandatory Conversion Condition (applied
as if it referred to 20.21% of the Issue Date VWAP) or the Third Mandatory
Conversion Condition would not be satisfied in respect of the Change
of Control Conversion Date as if the Change of Control Conversion Date
were a possible Mandatory Conversion Date.
The percentages used in the above conditions are derived from market
precedents and the cap on the number of Ordinary Shares that are permitted
to be issued in these circumstances under the Prudential Standards and
ratings agency requirements.
Clause 4.10 of the
Note Terms
2.4.4
What happens if
Conversion does
not occur on a
Change of Control
Conversion Date?
If ANZ has given a Change of Control Conversion Notice but the restrictions
prevent Conversion, ANZ will give a new Change of Control Conversion
Notice to Convert the Notes on the next Distribution Payment Date (under
clause 3.5(a) of the Note Terms). Conversion will not occur if the restrictions
described in Section 2.4.3 apply on that date. This process will be repeated
until a Conversion occurs.
Section 2.4.3
Clause 4.10 of
the Note Terms
25 If Conversion occurs as a result of a Change of Control Event, the period for calculating the VWAP may be less than 20 Business Days on which trading in Ordinary
Shares took place immediately preceding (but not including) the Business Day before the Change of Control Conversion Date. See clause 17.2 (definition of
“VWAP Period”) of the Note Terms. The VWAP during the relevant period before the Change of Control Conversion Date that is used to calculate the number of
Ordinary Shares that Holders receive may differ from the Ordinary Share price on or after the Change of Control Conversion Date. This means that the value of
Ordinary Shares received may be more or less than anticipated when they are issued or thereafter.
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2.5 AUTOMATIC CONVERSION FOLLOWING A TRIGGER EVENT
ANZ Capital Notes 7 are required to be Converted following the occurrence of a Trigger Event.
The Mandatory Conversion Conditions do not apply to a Conversion following a Trigger Event. The number
of Ordinary Shares that Holders will receive on a Conversion in these circumstances will not be greater than the
Maximum Conversion Number.
A Trigger Event may occur where ANZ encounters severe financial difficulty. In the event of a Conversion following
a Trigger Event, depending on the market price of Ordinary Shares at the relevant time, Holders are likely to receive
Ordinary Shares that are worth significantly less than approximately $101 for each Note they hold and to suffer loss
as a consequence. If the Notes are not Converted for any reason (including an Inability Event) they will be Written Off,
which means those Notes will never be Converted or Exchanged, all rights in relation to those Notes will be terminated,
and Holders will not have their capital repaid.
2.5.1
What is a
Trigger Event?
There are two types of Trigger Events:
•a Common Equity Capital Trigger Event; and
•a Non-Viability Trigger Event.
Common Equity Capital Trigger Event
A Common Equity Capital Trigger Event will occur if, at any time ANZ
determines, or APRA has notified ANZ in writing that it believes, that
a Common Equity Capital Ratio is equal to or less than 5.125%.
ANZ must immediately notify APRA in writing if it makes such a determination.
The Common Equity Capital Ratio is the ratio of Common Equity Tier 1 Capital
of the ANZ Level 1 Group or the ANZ Level 2 Group (as applicable) (including
Ordinary Shares, retained earnings and certain reserves but net of Common
Equity Tier 1 Capital Deductions) to the risk weighted assets of the ANZ Level 1
Group or the ANZ Level 2 Group respectively, as prescribed by APRA.
See Section 5.4 for more information about ANZ's Common
Equity Capital Ratio.
A Non-Viability Trigger Event
A Non-Viability Trigger Event will occur if, at any time:
•APRA notifies ANZ in writing that conversion or write off of Relevant
Securities is necessary because, without it, APRA considers that ANZ
would become non-viable; or
•APRA notifies ANZ in writing that it has determined that without a public
sector injection of capital (or equivalent support) ANZ would become
non-viable.
APRA has not provided specific guidance on when it will consider an entity to
be non-viable. However, APRA has indicated that non-viability is likely to arise
prior to the insolvency of an ADI. Non-viability could be expected to include
serious impairment of ANZ’s financial position and insolvency; however, it is
possible that APRA’s definition of non-viable may not necessarily be confined
to solvency or capital measures and APRA’s position on these matters may
change over time.
Sections 5.4
and 6.1.9
Clauses 4.5, 4.6,
4.9 and 17.2 of
the Note Terms
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2.5 AUTOMATIC CONVERSION FOLLOWING A TRIGGER EVENT (CONT)
2.5.2
What happens
following a
Trigger Event?
ANZ may be required to Convert a number of Notes into Ordinary Shares
following the occurrence of a Trigger Event. If a Trigger Event occurs, ANZ
must Convert the Notes immediately on that day. ANZ must notify Holders
as soon as practicable of that event occurring, but the Conversion occurs
whether or not that notice is given. Conversion in these circumstances is not
subject to the Mandatory Conversion Conditions (or any other conditions)
and so cannot be stopped for those reasons.
If Conversion has not been effected within 5 Business Days after the Trigger
Event Conversion Date for any reason (including an Inability Event), the Notes
will be Written Off with effect on and from the Trigger Event Conversion Date
and a Holder will suffer loss as a consequence.
If a Note is Written Off:
•the Note will not be Converted on that date and will not be Exchanged
on any other date; and
•the relevant Holder’s rights (including to payment of Distributions and
Face Value) in relation to such Note are immediately and irrevocably
terminated and written off.
Clauses 4.7, 4.8,
4.9, 6.1 and 6.13
of the Note Terms
2.5.3
How many
Ordinary Shares
will Holders
receive if Notes
are Converted on
a Trigger Event
Conversion Date?
If Notes are Converted on a Trigger Event Conversion Date, Holders will
receive a number of Ordinary Shares per Note that is equivalent to the
number calculated using the following formula, being subject to a cap
so that the number of Ordinary Shares received is limited to the Maximum
Conversion Number:
Face Value
99% x VWAP
The cap imposed by the Maximum Conversion Number is likely to mean that
fewer, and possibly significantly fewer, Ordinary Shares would be received by
a Holder than if this cap did not exist. This is explained further in Section 2.5.4.
The VWAP for this purpose is the VWAP during the 5 Business Days on
which trading in Ordinary Shares took place immediately preceding
(but not including) the Trigger Event Conversion Date (when the price
of Ordinary Shares may be low).
In the above calculation there is a small Conversion discount since selling
costs are likely to apply to the sale of Ordinary Shares on ASX.
Clauses 6.1 to 6.7
of the Note Terms
2.5.4
What is the
Maximum
Conversion
Number?
The Maximum Conversion Number in the case of a Trigger Event is
determined using the following formula:
Face Value
Issue Date VWAP x 0.2
This formula is derived from market precedents and the cap on the number
of Ordinary Shares that are permitted to be issued in these circumstances
under the Prudential Standards and ratings agency requirements.
This means that, depending on the market price of Ordinary Shares
at the relevant time, a Holder is likely to receive significantly less than
approximately $101 worth of Ordinary Shares per Note and is likely to
suffer a loss as a consequence.
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2.5 AUTOMATIC CONVERSION FOLLOWING A TRIGGER EVENT (CONT)
2.5.5
Is there a
worked example
illustrating how
many Ordinary
Shares a Holder
will receive
on Conversion
following a
Trigger Event?
This example illustrates how many Ordinary Shares a Holder will receive per
Note following Conversion on a Trigger Event Conversion Date assuming the
VWAP is $4.50 and the Issue Date VWAP is $27.00.
This example is for illustrative purposes only. The actual VWAP, Issue Date
VWAP and Maximum Conversion Number may be higher or lower than in this
example and Issue Date VWAP may be adjusted after the Issue Date in limited
circumstances (see Section 2.2.7).
Step 1 – Calculate the indicative number of Ordinary Shares using
the Conversion mechanics
Face Value $100.00
Divided by VWAP x 0.99 ÷ $4.4550
Ordinary Shares per Note 22.4467
Step 2 – Calculate the Maximum Conversion Number
Face Value $100.00
Divided by Issue Date VWAP × 0.2 ÷ $5.40
Ordinary Shares per Note =18.5185
Step 3 – Assess the effect of the Maximum Conversion Number
In this example, the Maximum Conversion Number is lower than the indicative
number of Ordinary Shares a Holder would receive per Note calculated using
the Conversion formula. As a result, the Maximum Conversion Number would
cap the number of Ordinary Shares a Holder would receive per Note at
18.5185 Ordinary Shares. If those Ordinary Shares were sold on ASX at the
same price as the VWAP (being $4.50), the Holder would receive $83.33 and
have suffered a loss on their investment of $16.67.
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2.5 AUTOMATIC CONVERSION FOLLOWING A TRIGGER EVENT (CONT)
2.5.6
How many
Notes need to
be Converted or
Written Off on the
occurrence of a
Trigger Event?
If a Trigger Event occurs, ANZ must convert or write off sufficient Relevant
Securities (including some or all Notes) to restore the Common Equity Capital
Ratio to a percentage above 5.125%, or to satisfy APRA that ANZ is viable
without further conversion or write off (as applicable).
If ANZ is required to Convert some Notes, ANZ will endeavour to Convert
Notes and convert into Ordinary Shares or write off other Relevant Securities
on an approximately pro-rata basis or in a manner that is otherwise, in the
opinion of ANZ, fair and reasonable. This is subject to such adjustment as ANZ
may determine to take account of the effect on marketable parcels and the
need to round to whole numbers the number of Ordinary Shares and any
Notes or other Relevant Securities remaining on issue. In addition, where the
Relevant Securities are in different currencies, ANZ may treat the Relevant
Securities as if converted into a single currency at rates of exchange it
considers reasonable. However, this determination must not impede the
immediate Conversion of the relevant number of Notes.
Holders should be aware that:
•Relevant Securities such as Notes, CN2, CN3, CN4, CN5 and CN6 will be
converted or written off before any Tier 2 Capital instruments are converted
or written off;
•ANZ has no obligation to maintain on issue any Relevant Securities and
does not, and may never, have on issue Relevant Securities which require
them to be converted or written off before the Notes or in full; and
•where a Non-Viability Trigger Event occurs because APRA determines that,
without a public sector injection of capital or equivalent support, ANZ
would become non-viable, all the Notes will be Converted.
The Conversion of Notes into Ordinary Shares on the Trigger Event Conversion
Date following the occurrence of a Trigger Event is not subject to the
Mandatory Conversion Conditions described in Section 2.2.2 being satisfied.
This means that, due to the application of the Maximum Conversion Number,
depending on the market price of Ordinary Shares at the time, Holders are
likely to receive significantly less than approximately $101 worth of Ordinary
Shares per Note and to suffer loss as a consequence.
Clauses 4.8, 4.9
and 9.11 of the
Note Terms
2.6 OTHER
2.6.1
Can ANZ issue
further Notes or
other instruments?
ANZ reserves the right to issue further securities of any kind (whether
ranking equally with, in priority to or junior to or having different rights
from the Notes) without the consent of the Holders.
Notes do not:
•confer on Holders any right to subscribe for new securities in ANZ or
to participate in any bonus issues of shares in ANZ’s capital;
•prevent ANZ from redeeming, buying back, converting, returning
capital on or converting any securities, other than the Notes
(except as described in Section 2.1.7); and
•prevent ANZ from incurring or guaranteeing any indebtedness upon
such terms as ANZ thinks fit in its sole discretion.
Clause 9.11 of the
Note Terms
2.6.2
What voting rights
do Notes carry?
Holders do not have voting rights at a meeting of members of ANZ.Clause 10.2 of the
Note Terms
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2.6 OTHER (CONT)
2.6.3
Can ANZ amend
the Note Terms?
Subject to complying with all applicable laws, ANZ may amend the Note
Terms without the consent of Holders in circumstances including where
ANZ reasonably considers the amendment:
• is made to correct a manifest error;
•is of a formal, minor or technical nature;
•is necessary to comply with any law, the provisions of any statute
or the requirements of any statutory authority;
•is made in accordance with ANZ’s adjustment rights in clause 6 of
the Note Terms;
• is expedient for the purposes of listing or clearing the Notes;
•amends certain dates or time periods in connection with Mandatory
Conversion or Exchange; or
•in any other case, will not materially adversely affect the rights of
Holders as a whole.
ANZ may also amend the Note Terms if the amendment has been approved
by a Special Resolution.
No amendment to the Note Terms is permitted without APRA’s prior written
approval if such amendment may affect the classification of Notes as
Additional Tier 1 Capital on a Level 1, Level 2 or (if applicable) Level 3 basis.
Clause 14 of the
Note Terms
2.6.4
What is an
Approved
NOHC Event?
An Approved NOHC Event is an event initiated by the Directors which would
result in ANZ having an ultimate holding company which is a “non-operating
holding company” within the meaning of the Banking Act (NOHC) and where,
following the occurrence of that event:
•the ordinary shares of the NOHC are listed on ASX; and
•the NOHC agrees to Convert the Notes into Ordinary Shares in the NOHC
in place of ANZ's obligation to Convert the Notes into Ordinary Shares.
If an Approved NOHC Event occurs, the Note Terms may be amended to
enable the substitution of the Approved NOHC as the issuer of ordinary
shares on Conversion (including following the Mandatory Conversion Date).
The Approved NOHC will use all reasonable endeavours to procure quotation
of these shares on the securities exchange on which its other Ordinary Shares
are quoted.
The occurrence of an Approved NOHC Event does not allow ANZ to elect
to Exchange Notes nor does it entitle Holders to Exchange their Notes.
Holders do not have any right to vote on an Approved NOHC Event
and Holders have no rights to require ANZ to give an Approved NOHC
Substitution Notice.
Following the substitution of an Approved NOHC as issuer of the Ordinary
Shares on Conversion, prior to Conversion, Holders continue to hold a security
in ANZ which ranks in a winding-up of ANZ as described in the table in
Section 1.3 and which is convertible into ordinary shares in the Approved
NOHC in the same circumstances in which it would have otherwise been
converted into Ordinary Shares in ANZ. Holders do not have any claim on the
assets of the Approved NOHC or any other subsidiary of the Approved NOHC
other than following Conversion as a holder of ordinary shares in the
Approved NOHC.
There is no restriction on an Approved NOHC declaring or paying a dividend
on, or buying back or reducing capital on its ordinary shares if ANZ does not
pay a Distribution on a Note.
Clauses 9.10, 11,
14.2 and 17.2 of
the Note Terms
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2.6 OTHER (CONT)
2.6.5
What is the ANZ
Capital Notes 7
Deed Poll?
A trustee has not been appointed for ANZ Capital Notes 7. Instead, the
ANZ Capital Notes 7 Deed Poll has been made by ANZ in favour of each
person who is from time to time a Holder. The ANZ Capital Notes 7 Deed Poll
gives legal effect to ANZ’s obligations in the Note Terms.
Under the ANZ Capital Notes 7 Deed Poll, ANZ also undertakes to
appoint the Registry and procure the Registry to establish and maintain
a principal Register.
The ANZ Capital Notes 7 Deed Poll also includes provisions for meetings
of Holders.
Holders will be bound by the terms of the ANZ Capital Notes 7 Deed Poll,
the Note Terms and this Prospectus when ANZ Capital Notes 7 are issued or
transferred to them or they purchase ANZ Capital Notes 7.
Each Holder can enforce ANZ’s obligations under the ANZ Capital Notes 7
Deed Poll, including the Note Terms and the provisions for meetings,
independently of the Registry and each other.
A copy of the ANZ Capital Notes 7 Deed Poll can be obtained from
capitalnotes.anz.com.
ANZ Capital Notes
7 Deed Poll
2.6.6
What if a Holder
is not resident
in Australia?
If the Register indicates that a Holder’s address is outside of Australia
(or ANZ believes that a Holder may not be a resident of Australia)
(such a Holder, a Foreign Holder) and that Foreign Holder’s Notes are to
be Converted, ANZ is entitled in certain circumstances to issue the relevant
Ordinary Shares to a nominee (who may not be ANZ or a Related Entity of
ANZ) who will sell those Ordinary Shares and pay a cash amount equal to
the net proceeds to the Foreign Holder.
Clauses 6.10 and
17.2 of the Note
Terms
2.6.7
What happens if
FATCA Withholding
is required to
be made?
Where a FATCA Withholding would be required or permitted to be made in
respect of Ordinary Shares issued on Conversion of Notes, ANZ may either
issue the Ordinary Shares which the Holder is obliged to accept to the Holder
of the Notes net of FATCA Withholding and issue the balance of Ordinary
Shares to a nominee or issue the Ordinary Shares which the Holder is obliged
to accept entirely to a nominee. In each case, the nominee (which may not be
ANZ or a Related Entity of ANZ) will sell the Ordinary Shares issued to it, deal
with any proceeds of their disposal in accordance with FATCA and, where the
Ordinary Shares have been issued entirely to the nominee, pay a cash amount
equal to the proceeds of their disposal net of any FATCA Withholding and
other amounts as specified in the Note Terms to the Holder.
Clause 6.11 of the
Note Terms
2.6.8
Where Ordinary
Shares are issued
to a nominee, does
the nominee or
ANZ have any
duties on a sale?
None of ANZ or the nominee owes any obligations or duties to Holders in
relation to the price at which Ordinary Shares are sold or has any liability for
any loss suffered by a Holder as a result of the sale of Ordinary Shares.
Clause 6.14 of the
Note Terms
2.6.9
Is there a time limit
on claims in respect
of the Notes?
Holders should be aware that ANZ is entitled to refuse any claim against it for
a payment under a Note where the claim is made more than 10 years (in the
case of Face Value) or 5 years (in the case of Distributions and other amounts)
from the date on which payment first became due.
Clause 13.4 of the
Note Terms
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2.6 OTHER (CONT)
2.6.10
Are determinations
by ANZ binding?
Except where there is fraud or a manifest error, any determination or
calculation which ANZ makes in accordance with the Note Terms is final
and binds ANZ, the Registry and each Holder.
Clause 13.5 of the
Note Terms
2.6.11
Does set-off
apply to payments
in respect of
the Notes?
A Holder does not have any right to set-off against ANZ in respect of
any claim by ANZ against that Holder and will have no offsetting rights or
claims on ANZ if ANZ does not pay a Distribution when scheduled under
the Note Terms.
ANZ may not exercise any right of set-off against a Holder in respect
of any claim by that Holder against ANZ.
Clause 9.5 of the
Note Terms
2.6.12
What is the power
of attorney?
Each Holder agrees to appoint each of ANZ, its officers and any External
Administrator of ANZ (each an Attorney) severally to be the attorney of the
Holder with power in the name and on behalf of the Holder to sign all
documents and transfers and do any other thing as may in the Attorney’s
opinion be necessary or desirable to be done in order for the Holder to
observe or perform the Holder’s obligations under these Note Terms including,
but not limited to, effecting any transfers or Conversion of Notes, making any
entry in the Register or exercising any voting power in relation to any consent
or approval required for Conversion, Redemption or Resale or in respect of an
Approved NOHC Event or the transfer of Notes to an Approved NOHC.
Clause 9.9 of the
Note Terms
2.6.13
What are the
tax implications
of investing
in the Notes?
Information about the Australian tax consequences of investing in the
Notes is set out in Section 7.
The tax implications of investing in Notes will depend on an investor’s
individual circumstances. Potential investors should obtain their own
tax advice.
Section 7
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THIS SECTION SETS OUT:
THE OPTIONS AVAILABLE TO CN2 HOLDERS;
THE DIFFERENCE BETWEEN CN2 AND ANZ
CAPITAL NOTES 7;
FURTHER INFORMATION ABOUT
PARTICIPATING IN THE REINVESTMENT
OFFER AND HOW TO REINVEST YOUR CN2
REDEMPTION PROCEEDS INTO ANZ CAPITAL
NOTES 7; AND
THE RISKS ASSOCIATED WITH PARTICIPATING
IN THE REINVESTMENT OFFER.
03
SECTION 03
ABOUT THE
REINVESTMENT
OFFER
How to ApplyAbout ANZTaxation SummaryAdditional InformationAppendixInvestment Risks
37

TopicSummary
3.1 THE REINVESTMENT OFFER
3.1.1
What are CN2?
CN2 (or ANZ Capital Notes 2) are fully paid, non-cumulative, convertible, transferable, redeemable,
subordinated, perpetual, unsecured notes that were issued by ANZ on 31 March 2014. CN2 trade
on the ASX under the ASX code “ANZPE”.
3.1.2
What is
happening to
CN2?
On 15 February 2022, ANZ issued a redemption notice in accordance with the CN2 terms. The
redemption notice confirms that on 24 March 2022, ANZ will redeem all CN2 for their face value
of $100 per CN2 (CN2 Redemption Price). If you are an Eligible CN2 Holder and participate in
the Reinvestment Offer, your CN2 Redemption Proceeds will be applied to subscribe for Notes
(see below for further details).
The redemption notice is irrevocable (except as provided by the CN2 terms) but the CN2
Redemption may not occur for a number of reasons, including if a trigger event occurs under
the CN2 terms or APRA revokes its approval of the CN2 Redemption.
If the CN2 Redemption does not occur, except as a result of a trigger event occurring in respect
of the CN2, CN2 holders will continue to hold their CN2.
To facilitate the CN2 Redemption, the CN2 will cease trading on ASX on 14 March 2022.
A final distribution of $1.1403 per CN2 is scheduled to be paid by ANZ in respect of all CN2 on
24 March 2022 (subject to the payment conditions in the CN2 terms and ANZ's absolute discretion)
(Final CN2 Distribution). The record date for the Final CN2 Distribution is 7.00pm on 16 March
2022. All holders of CN2 on the record date will be entitled to receive the Final CN2 Distribution,
including Eligible CN2 Holders who participate in the Reinvestment Offer.
3.1.3
What is the
Reinvestment
Offer?
The Reinvestment Offer is an invitation to Eligible CN2 Holders to apply to have some or all
of their CN2 Redemption Proceeds reinvested into Notes.
26

If you are an Eligible CN2 Holder and you participate in the Reinvestment Offer, your CN2
Redemption Proceeds that you reinvest into Notes will be used to fund the Application Payment
for the Notes. Those CN2 Redemption Proceeds will not be paid to you.
Eligible CN2 Holders are not required to participate in the Reinvestment Offer and there is no
guarantee Applications under the Reinvestment Offer will be accepted.
26 The market price of CN2 is subject to change from time to time and CN2 holders may be able to sell or dispose of their CN2 at a price higher or lower than
the price they would receive for the CN2 under the CN2 Redemption (being $100 per CN2). The current market price of CN2 is available at the ASX website
(asx.com.au).
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TopicSummary
3.1 THE REINVESTMENT OFFER (CONT)
3.1.4
What are my
options as a
CN2 holder?
Participate in the Reinvestment Offer
Eligible CN2 Holders can apply to participate in the Reinvestment Offer. All Applications for
the Reinvestment Offer must be submitted through a Syndicate Broker. Information on how
to apply to participate in the Reinvestment Offer is set out in Section 4.
Do not participate in the Reinvestment Offer
If you are not eligible to participate in the Reinvestment Offer, or if you are eligible but
choose not to participate, you can:
•take no action, in which case your CN2 Redemption Proceeds will be paid to you on
24 March 2022 along with the Final CN2 Distribution; or
•sell your CN2 on-market through your broker or otherwise at the prevailing market price.
Where you do so you:
−may have to pay brokerage and may receive a price greater or less than the face value
of $100 per CN2;
−will not be entitled to receive the Final CN2 Distribution if you are not a CN2 holder
on the record date for the distribution (7.00pm on 16 March 2022); and
−if eligible, may use the sale proceeds from any CN2 you sell to subscribe for Notes
under the New Money Offer before the Closing Date for the New Money Offer.
Purchase Notes under the New Money Offer
You can separately apply for Notes under the New Money Offer whether or not you apply
to participate in the Reinvestment Offer. All Applications for the New Money Offer and the
Reinvestment Offer must be made through a Syndicate Broker.
There are important differences between CN2 and ANZ Capital Notes 7 that Eligible CN2
Holders should consider before applying to participate in the Reinvestment Offer.
See Section 3.2 for more information.
3.1.5
Am I eligible to
participate in the
Reinvestment
Offer?
Only Eligible CN2 Holders can apply to participate in the Reinvestment Offer.
To be an Eligible CN2 Holder, you must:
•have been a registered holder of CN2 at 7:00pm on 10 February 2022;
•be shown on the CN2 register as having an address in Australia;
•not be in the United States or acting as a nominee for, or for the account or benefit of,
a US Person or not otherwise be prevented from receiving the invitation to participate
in the Offer or ANZ Capital Notes 7 under the laws of any jurisdiction; and
•be an Institutional Investor or a client of a Syndicate Broker who is either a Wholesale
Investor or a Retail Investor within the Notes Target Market who has received personal advice
from a licensed professional adviser.
3.1.6
How do I
participate in the
Reinvestment
Offer?
All Applications under the Reinvestment Offer must be made through a Syndicate Broker.
If you are a Retail Investor, you must seek professional advice as to whether you are within the
Notes Target Market and whether the investment in the Notes is suitable in light of your particular
objectives, financial situation and needs. Further information on how to apply to participate in
the Reinvestment Offer is set out in Section 4.
If you apply to participate in the Reinvestment Offer, you must ensure that you do not otherwise
sell or dispose of any of the CN2 the subject of your Application.
Eligible CN2 Holders who apply to participate in the Reinvestment Offer are taken to agree
to a holding lock being placed on the CN2 the subject of their Application until the Issue Date.
If CN2 the subject of a Reinvestment Offer Application are disposed of prior to the Closing Date
for the Reinvestment Offer, the number of Notes applied for will be reduced to equal the number
of CN2 available on the Closing Date for the Reinvestment Offer, which is expected to be 5:00pm
on 15 March 2022.
An Application to participate in the Reinvestment Offer is irrevocable once submitted unless
ANZ gives notice that it will not accept the Application.
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TopicSummary
3.1 THE REINVESTMENT OFFER (CONT)
3.1.7
What distributions
will I receive as a
CN2 holder?
The Final CN2 Distribution of $1.1403 per CN2 is scheduled to be paid by ANZ in respect of all
CN2 on 24 March 2022 (subject to the payment conditions in the CN2 terms and ANZ's absolute
discretion). The record date for the Final CN2 Distribution is 7.00pm on 16 March 2022. All holders
of CN2 on the record date will be entitled to receive the Final CN2 Distribution, including Eligible
CN2 Holders who participate in the Reinvestment Offer.
Any payment of the Final CN2 Distribution will be made via direct credit in accordance with
your existing CN2 payment instructions. If you have not provided direct credit details, ANZ will
deal with any payment in accordance with the CN2 terms.
If you wish to change your CN2 payment instructions for the payment of the Final CN2 Distribution
then you must provide updated instructions to the Registry by 5:00pm on 16 March 2022.
3.1.8
If I apply to
participate in the
Reinvestment
Offer, will I receive
a priority
allocation of
Notes?
Details on the allocation policy are set out in Section 4.4.3.
3.1.9
Can my
Application be
subject to any
scale back?
For information of any potential scale back under the Offer (including in respect of Applications
under the Reinvestment Offer), see Section 4.4.3.
3.1.10
What are the tax
implications of
participating in
the Reinvestment
Offer and will any
brokerage or
stamp duty be
payable?
A general outline of the Australian taxation implications for certain investors who are
Australian residents for tax purposes of participating in the Reinvestment Offer can be
found in the Australian Taxation Summary in Section 7.
No brokerage or stamp duty is payable in connection with the CN2 Redemption or
the reinvestment of your CN2 Redemption Proceeds in Notes.
CN2 Holders who choose to sell their CN2 on-market through their broker may
be required to pay applicable brokerage.
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
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About the Reinvestment Offer
« CONTENTS
Investment Overview
About ANZ Capital Notes 7

3.2 WHAT ARE THE KEY DIFFERENCES BETWEEN CN2 AND ANZ CAPITAL
NOTES 7?
There are a number of differences between CN2 and ANZ Capital Notes 7 which you should be aware of before deciding to
apply to participate in the Reinvestment Offer. The following table describes the key features of the ANZ Capital Notes 7 and
CN2 and highlights the main differences between them. You should consider these differences in light of your investment
objectives, financial situation and particular needs (including financial and taxation issues) before deciding to apply for ANZ
Capital Notes 7.
TopicCN2ANZ Capital Notes 7
Protected under the
Financial Claims Scheme
NoNo
Te r m
Perpetual, subject to mandatory conversion
into Ordinary Shares on 24 March 2024
(approximately 10 years after its issue date)
Perpetual, subject to Mandatory Conversion
into Ordinary Shares on 20 September 2031
(approximately 9.5 years after the Issue
Date)
27, 28
Margin
3.25%2.7% to 2.9% to be determined under
the Bookbuild
Distribution rate
FloatingFloating
Distribution
payment dates
Half yearlyQuarterly
Rights if distributions
not fully franked
Franked, subject to gross up for any
unfranked portion
Franked, subject to gross up for any
unfranked portion
Conditions to payment
of distributions
Yes, subject to ANZ's absolute discretion
and certain payment conditions
Yes, subject to ANZ’s absolute discretion
and Payment Conditions
Distribution restriction
if distribution not paid
Yes, if a distribution is not paid ANZ must
not pay certain distributions on its Ordinary
Shares until and including the next semi-
annual distribution payment date
Yes, applies to Ordinary Shares until the
next quarterly Distribution Payment Date –
see Section 2.1.7
Transferable
Yes – quoted on ASX as “ANZPE”Yes – expected to be quoted on ASX
as "ANZPJ"
Mandatory conversion
into Ordinary Shares
Yes, on 24 March 2024 if the mandatory
conversion conditions are satisfied
Yes, on 20 September 2031
28
if the
Mandatory Conversion Conditions
are satisfied
ANZ’s early
conversion option
Yes, on 24 March 2022 with APRA’s prior
written approval
Yes, on 20 March 2029, 20 June 2029 or
20 September 2029, with APRA’s prior
written approval – see Section 2.3
ANZ’s early
redemption option
Yes, on 24 March 2022 with APRA’s prior
written approval
Yes, on 20 March 2029, 20 June 2029 or
20 September 2029, with APRA’s prior
written approval – see Section 2.3
27 ANZ Capital Notes 7 may also be Converted, Redeemed, Resold or Written Off in a number of other circumstances as described in this Prospectus.
28 Due to the Business Day convention, the Mandatory Conversion Date is deferred from 20 September 2031 to 22 September 2031.
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TopicCN2ANZ Capital Notes 7
ANZ resale rights
Yes, with APRA’s prior written approvalYes, with APRA’s prior written approval –
see Section 2.3
Other ANZ early
redemption or resale
options
Tax Events and Regulatory Events with
APRA’s prior written approval
Tax Events and Regulatory Events
with APRA’s prior written approval –
see Section 2.3
Other ANZ early
conversion options/
events
Tax Events and Regulatory Events with
APRA’s prior written approval
Change of control
Tax Events and Regulatory Events
with APRA’s prior written approval –
see Section 2.3
Change of Control Event – see Section 2.4
Automatic conversion
or write-off following
a trigger event
Yes, ANZ must convert CN2 if the common
equity capital ratio of the ANZ Level 1 Group
or the ANZ Level 2 Group as prescribed by
APRA falls to or below 5.125% or if a
non-viability event occurs.
If ANZ is unable to convert within 5 business
days of the trigger event, the CN2 will not
be converted but will instead be written off.
Yes, ANZ must Convert the Notes if a
Common Equity Capital Trigger Event in
respect of the ANZ Level 1 Group or the
ANZ Level 2 Group, or a Non-Viability Trigger
Event, occurs – see Section 2.5.
If the Notes are not Converted within 5
Business Days of a Trigger Event Conversion
Date for any reason (including an Inability
Event) in accordance with the Note Terms,
the Notes may be Written Off –
see Section 6.1.9.
Capital classification
Additional Tier 1 CapitalAdditional Tier 1 Capital
Voting rights
No right to vote at general meeting of
holders of Ordinary Shares
No right to vote at general meeting of
holders of Ordinary Shares
Ranking
Equal to ANZ Capital Securities, senior to
Ordinary Shares, subordinated to claims of
senior creditors (including ANZ depositors)
Equal to ANZ Capital Securities, senior to
Ordinary Shares, subordinated to claims of
Senior Creditors (including ANZ depositors)
3.3 WHAT ARE THE RISKS ASSOCIATED WITH PARTICIPATING
IN THE REINVESTMENT OFFER AND ACQUIRING NOTES?
There are certain risks associated with participating in the Reinvestment Offer and acquiring Notes, which include:
•the CN2 Redemption Price of $100 per CN2 (which does not include the Final CN2 Distribution) may be less than the
ASX trading price of CN2 (which may include an amount representing the accrued portion of the Final CN2 Distribution).
Rather than participating in the Reinvestment Offer, Eligible CN2 Holders may obtain a better financial outcome by selling
their CN2 on-market and investing the proceeds in ANZ Capital Notes 7 (although any Application may be scaled back);
•if you are an Eligible CN2 Holder and you apply for Notes under the Offer (pursuant to the Reinvestment Offer or
otherwise), you may receive an allocation of ANZ Capital Notes 7. As such, you will be subject to the risks associated
with an investment in ANZ Capital Notes 7 and in ANZ, many of which are outside the control of ANZ and its Directors.
These risks are outlined in Section 6 and should be considered before you apply under the Offer (including under the
Reinvestment Offer); and
•participation in the Reinvestment Offer does not involve a simple rollover into a similar investment. ANZ Capital Notes 7
and CN2 have different benefits and risks, which must be evaluated separately. For a description of the key differences
between the two securities, see Section 3.2.
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Investment Overview
About the Reinvestment OfferAbout ANZ Capital Notes 7

THIS SECTION SETS OUT:
THE NOTES TARGET MARKET;
WHAT YOU MUST DO IF YOU WISH
TO APPLY FOR NOTES;
WHO THE OFFER IS MADE TO;
DETAILS OF THE BOOKBUILD
AND ALLOCATION POLICY;
DETAILS OF ASX QUOTATION
AND TRADING; AND
OTHER INFORMATION RELEVANT
TO YOUR APPLICATION.
04
SECTION 04
HOW TO
APPLY
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4.1 NOTES TARGET MARKET
ANZ has made a target market determination for ANZ Capital Notes 7 in accordance with its obligations under the DDO
Regime (Target Market Determination). The Target Market Determination is available at capitalnotes.anz.com.
The Target Market Determination describes, among other things, the class of Retail Investors that comprise the target market
for ANZ Capital Notes 7 (Notes Target Market) being investors who:
•are seeking to acquire an investment product with the ability to generate income;
•are not seeking capital growth;
•are able to bear the risks associated with an investment in ANZ Capital Notes 7 (which are summarised in Section 1.5 and
detailed in Section 6), in particular, the lack of certainty as to payment of distributions and the potential loss of some or
all of the capital invested in ANZ Capital Notes 7;
•do not require certainty as to repayment of capital invested within a specific investment timeframe; and
•seek the ability to dispose of ANZ Capital Notes 7 by sale on a licensed securities exchange at the price available
on the exchange.
If you are a Retail Investor and wish to apply for Notes:
•you must seek professional advice as to whether you are within the Notes Target Market and whether the investment
in the Notes is suitable in light of your particular objectives, financial situation and needs; and
•you can only apply for the Notes if you are within the Notes Target Market and you have received personal advice from
a licensed professional adviser.
If you have any questions about the Offer, the Notes or the Notes Target Market, you should also contact your Syndicate
Broker or seek advice from a professional adviser who is licensed by ASIC to give that advice.
4.2 APPLYING FOR ANZ CAPITAL NOTES
29
All Applications must be submitted through a Syndicate Broker. No Applications can be made directly to ANZ.
The Offer does not contain a specific offer for ANZ securityholders (unlike previous retail hybrid security offers by ANZ)
and Eligible CN2 Holders cannot apply directly to ANZ to participate in the Reinvestment Offer.
Who may apply?
Clients of Syndicate Brokers who are either a Wholesale Investor, or a Retail Investor
within the Notes Target Market who has received personal advice from a licensed
professional adviser.
When to apply
Completed Applications must be received by your Syndicate Broker in sufficient time
for your Syndicate Broker to process your Application on your behalf by the relevant
Closing Date.
How to apply
•You must contact your Syndicate Broker for instructions on how to apply.
•If you are applying under the Reinvestment Offer:
−you must apply to reinvest a minimum of 50 CN2 in Notes (unless you hold less than
that amount of CN2);
−if you hold less than 50 CN2, you can still apply to participate in the Reinvestment Offer,
but you must apply to reinvest all of your CN2 in Notes; and
−an Application Payment is not necessary as your CN2 Redemption Proceeds will
be applied to the Application Payment to the extent required.
•If you are applying under the New Money Offer:
−your Application must be for a minimum of 50 Notes ($5,000); and
−an Application Payment will be necessary. Contact your Syndicate Broker for
instructions on how to make the Application Payment.
29 The key dates for the Offer are indicative only and may change without notice. ANZ and the Joint Lead Managers may reduce or extend any Closing Date
without notice, or withdraw the Offer at any time before ANZ Capital Notes 7 are issued.
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4.2.1 No cooling off rights
No cooling off rights apply to an Application for Notes.
You cannot withdraw your Application once it has been
lodged, except as permitted under the Corporations Act.
4.2.2 Representations, warranties and
acknowledgements
When lodging your Application, you will be required to give
certain representations, warranties and acknowledgements
to ANZ. In particular, if you are a Retail Investor, you will be
required to represent to ANZ that you have received
personal advice from a qualified financial adviser in relation
to your acquisition of ANZ Capital Notes 7.
4.2.3 Brokerage and stamp duty
No brokerage or stamp duty is payable on your Application.
You may have to pay brokerage, but will not have to pay any
stamp duty, on any later sale of your Notes on ASX after
Notes have been quoted on ASX.
4.2.4 Refunds
If you apply for Notes under the Offer and are not allotted
any Notes or you are allotted fewer Notes than the number
that you applied and paid for as a result of a scale back, all
or some of your Application Payment (as applicable) will be
refunded to you (without interest) as soon as practicable
after the Issue Date. For further information on potential
scale back – see Section 4.4.3.
In the event that the Offer does not proceed for any reason,
all applicants will have their Application Payments refunded
(without interest) as soon as practicable.
4.3 PROVISION OF PERSONAL
INFORMATION
The information about you included as part of your
Application is used for the purposes of processing
your Application and, if your Application is successful,
to administer your Notes. For information about the
acknowledgements and privacy statement in relation
to personal information that you provide to ANZ by
completing an Application – see Section 8.10.
4.4 BOOKBUILD AND
ALLOCATION POLICY
4.4.1 Bookbuild
The Bookbuild will be conducted by the Joint Lead
Managers in consultation with ANZ. In the Bookbuild,
participants will be invited to lodge bids for a number of
Notes. The Bookbuild will be conducted before the Opening
Date to determine the Margin and firm Allocations of Notes
to Bookbuild participants. The Bookbuild will be conducted
in the manner contemplated in this Prospectus and
otherwise on the terms and conditions agreed to by ANZ
and the Joint Lead Managers in the Offer Management
Agreement.
4.4.2 Settlement
The Joint Lead Managers have agreed with ANZ to bid
into the Bookbuild on a broker firm basis. This means that
each Joint Lead Manager (other than ANZ Securities) is
responsible for ensuring that payment is made for all Notes
allocated to them or at their direction.
The Offer Management Agreement may be terminated
by the Joint Lead Managers in certain circumstances. If the
Offer Management Agreement is terminated, Bookbuild
participants can withdraw their firm Allocations. For details
of the fees payable under the Offer Management
Agreement – see Section 8.5.
4.4.3 Allocation Policy
Allocations to Syndicate Brokers will be determined by
ANZ in consultation with the Joint Lead Managers following
completion of the Bookbuild.
Allocations to applicants by a Syndicate Broker (including
in respect of allocations under the Reinvestment Offer) are
at the discretion of that Syndicate Broker. It is possible for
Applications to be scaled back by a Syndicate Broker. ANZ
takes no responsibility for any allocation, scale back or
rejection that is decided by a Syndicate Broker.
Allocations to Institutional Investors will be determined
by ANZ Securities and ANZ following completion of
the Bookbuild.
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4.5 ASX QUOTATION,
CONFIRMATION STATEMENTS
AND OTHER INFORMATION
4.5.1 ASX quotation
ANZ will apply to ASX for Notes to be quoted on ASX.
If ASX does not grant permission for Notes to be quoted
within three months after the date of this Prospectus,
Notes will not be issued and all Application Payments
will be refunded (without interest) to applicants as soon
as practicable.
It is expected that Notes will begin trading on ASX on
a normal settlement basis on 25 March 2022 under ASX
code "ANZPJ".
You are responsible for confirming your holding before
trading in Notes. If you are a successful applicant and sell
your Notes before receiving your Confirmation Statement,
you do so at your own risk.
You may call the ANZ Information Line on 1800 113 399
(within Australia) or +61 3 9415 4010 (international)
(Monday to Friday – 8:30am to 5:30pm) or your Syndicate
Broker, after the Issue Date to enquire about your
Allocation.
4.5.2 Confirmation Statements
ANZ has applied for Notes to participate in CHESS.
No certificates will be issued for Notes. ANZ expects that
Confirmation Statements for issuer sponsored holders and
confirmations for CHESS holders will be despatched to
successful applicants by 31 March 2022.
4.5.3 Provision of bank account details
for Distributions
ANZ’s current policy is that Distributions will be paid
in Australian dollars by direct credit into nominated
Australian financial institution accounts (excluding credit
card accounts) for Holders with a registered address in
Australia. For all other Holders, ANZ’s current policy is that
Distributions will be paid by Australian dollar cheque.
4.5.4 Provision of Tax File Number or
Australian Business Number
If you are a successful applicant who has not already
quoted your TFN or ABN and you are issued any Notes,
then you may be contacted in relation to quoting your
TFN, ABN or both.
The collection and quotation of TFNs and ABNs
are authorised, and their use and disclosure is strictly
regulated, by tax laws and the Privacy Act. If collected,
ANZ will only use and disclose your TFN or ABN in
accordance with those laws and to fulfil its obligations
in connection with the Notes.
You are not required to provide your TFN or ABN.
However, if you decline to provide this information,
ANZ may be required to withhold Australian tax at the
maximum marginal tax rate plus the Medicare levy
(currently being 47%) on the unfranked part of any
Distribution unless you have provided:
•your TFN or, in certain circumstances, your ABN; or
•notification that you are exempt from providing this
information.
Further, successful applicants who do not have an address
in Australia registered with the Registry, or who direct the
payment of any Distribution to an address outside of
Australia, may have an amount deducted for Australian
withholding tax from any Distribution paid, to the extent
that the Distribution is not fully franked.
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Investment Overview
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THIS SECTION SETS OUT:
A DESCRIPTION OF ANZ’S BUSINESS
INCLUDING SUMMARY FINANCIAL
INFORMATION;
FINANCIAL INFORMATION DEMONSTRATING
THE EFFECT OF THE OFFER ON ANZ; AND
A DESCRIPTION OF ANZ’S CAPITAL
MANAGEMENT AND CAPITAL RATIOS,
FUNDING AND LIQUIDITY.
05
SECTION 05
ABOUT
ANZ
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5.1 OVERVIEW OF ANZ
The ANZ Group began its Australian operations in 1835
and its New Zealand operations in 1840. ANZ is a public
company limited by shares incorporated in Australia and
was registered in the State of Victoria on 14 July 1977.
ANZ’s registered office is located at Level 9, 833 Collins
Street, Docklands, Victoria, 3008, Australia and the
telephone number is +61 3 9683 9999. Its Australian
Company Number is 005 357 522.
The ANZ Group provides a broad range of banking and
financial products and services to retail, small business,
corporate and institutional customers. Geographically,
its operations span Australia, New Zealand, a number of
countries in the Asia Pacific region, the United Kingdom,
France, Germany and the United States.
As at 30 September 2021, the ANZ Group had total assets
of approximately A$978.9 billion, and shareholders’ equity
excluding non-controlling interests of approximately
A$63.7 billion. ANZ’s principal ordinary share listing and
quotation is on the ASX. Its ordinary shares are also quoted
on the New Zealand Stock Exchange (NZX). At the close
of trading on 30 September 2021, ANZ had a market
capitalisation of approximately A$79.5 billion which ranked
among the top six largest companies listed on the ASX.
Principal activities of the ANZ Group
The Group operates on a divisional structure with five
continuing divisions: Australia Retail and Commercial,
Institutional, New Zealand, Pacific, and TSO and
Group Centre.
The divisions reported below are consistent with operating
segments as defined in AASB 8 Operating Segments and
with internal reporting provided to the chief operating
decision maker, being the Chief Executive Officer.
As of 30 September 2021, the principal activities of
the five continuing divisions were:
Australia Retail and Commercial
The Australia Retail and Commercial division comprises
the following business units:
•Retail: which provides products and services to
consumer customers in Australia via the branch
network, mortgage specialists, contact centres, a
variety of self-service channels (digital and internet
banking, website, ATMs and phone banking) and
third party brokers.
•Commercial and Private Bank: which provides a full
range of banking products and financial services,
including asset financing, across the following customer
segments: medium to large commercial customers,
small business owners and high net worth individuals
and family groups, in addition to financial planning
services provided by salaried financial planners and
investment lending secured by approved securities.
Institutional
The Institutional division services governments, global
institutional and corporate customers via the following
business units:
•Transaction Banking: which provides customers
with working capital and liquidity solutions including
documentary trade, supply chain financing, commodity
financing as well as cash management solutions,
deposits, payments and clearing.
•Corporate Finance: which provides customers with
loan products, loan syndication, specialised loan
structuring and execution, project and export finance,
debt structuring and acquisition finance and corporate
advisory services.
•Markets: which provides customers with risk
management services in foreign exchange, interest
rates, credit, commodities and debt capital markets
in addition to managing the Group's interest rate
exposure and liquidity position.
New Zealand
The New Zealand division comprises the following
business units:
•Personal (previously Retail): which provides a full
range of banking and wealth management services
to consumer and private banking customers. It delivers
services via internet and app-based digital solutions and
network of branches, mortgage specialists, relationship
managers and contact centres.
•Business (previously Commercial): which provides a
full range of banking services including small business
banking, through digital, branch and contact centre
channels, and traditional relationship banking and
sophisticated financial solutions through dedicated
managers. These cover privately owned small, medium
and large enterprises, the agricultural business segment,
government and government-related entities.
Pacific
The Pacific division provides products and services to retail
customers, small to medium-sized enterprises, institutional
customers and governments located in the Pacific Islands.
Products and services include retail products provided
to consumers, traditional relationship banking and
sophisticated financial solutions provided to business
customers through dedicated managers.
TSO and Group Centre
TSO and Group Centre division provides support to
the operating divisions, including technology, group
operations, shared services, property, risk management,
financial management, strategy, marketing, human
resources and corporate affairs. The Group Centre includes
residual components of Group divestments, Group Treasury,
Shareholder Functions and minority investments in Asia.
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5.2 ANZ GROUP STRATEGY
Our strategy is focused on improving the financial wellbeing of our customers; by providing excellent services,
tools and insights that engage and retain customers and positively change their behaviour.
In particular, we want to help customers:
•save for, buy and own a sustainable, liveable and affordable home;
•start or buy and sustainably grow their business; and
•move capital and goods around the region and sustainably grow their business.
We will achieve our strategy through:
•Propositions our customers love – with easy to use services that evolve to meet their changing needs. Through better
use of data, we will be able to provide valuable insights about our customers and how they can improve their financial
wellbeing and sustainability over their lifetime, enabling us to create superior propositions.
•Flexible and resilient digital banking Platforms – powering our customers and made available for others to power the
industry. Platforms underpin our own propositions and will increasingly underpin those of our customers, notably other
banks or institutional corporations.
•Partnerships that unlock new value – with ecosystems that help customers further improve their financial wellbeing
and sustainability. We recognise that no one institution can do everything or innovate at the pace necessary to satisfy
customers’ needs – strong relationships with partners is therefore vital.
•Purpose and values-led people – who drive value by caring about our customers and the outcomes we create.
Our people listen, learn and adapt and do the right thing the first time, delivering the outcomes that address financial
and sustainability challenges.
Building the financial wellbeing and sustainability of our customers creates a positive cycle of benefits. It directly benefits
customers and also grows shareholder returns; it leads to a strong and positive reputation; it ultimately means it costs less to
acquire customers; and it grows loyalty, which in turn generates better returns – delivering more capital so we can invest in
building a better bank and continue to improve the lives of our customers.
In particular, we want to help customers:
Save for, buy and own a
sustainable, liveable and
affordable home
Start or buy and
sustainably grow
their business
Move capital and goods around
the region and sustainably grow
their business
$
$
$
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5.3 FINANCIAL INFORMATION
ABOUT ANZ
5.3.1 2021 Financial Year
The Group’s statutory profit after tax for the year ended
30 September 2021 attributable to the shareholders of
ANZ was $6,162 million, compared to $3,577 million for
the year ended 30 September 2020, an increase of 72%.
The dividend for the year ended 30 September 2021 was
142 cents per Ordinary Share (fully franked) compared to
60 cents per Ordinary Share (fully franked) for the year
ended 30 September 2020, an increase of 137%.
5.3.2 2022 Pillar 3 update
ANZ released its Pillar 3 and a market update for the
3 months to 31 December 2021 on 7 February 2022.
Further information is available at shareholder.anz.com/
announcements.
5.3.3 Historical results
The profit information in Section 5.3.1 is historical
information and is not a forecast of results to be expected
in future periods.
5.3.4 Impact of the Offer on ANZ’s
consolidated balance sheet
The issue of the Notes will increase the Group’s
subordinated debt and cash by approximately $985 million
($1 billion gross proceeds of the Offer, less approximately
$15 million of Offer costs) with no impact on the Group’s
net assets or shareholders’ equity.
If all CN2 are redeemed by ANZ on 24 March 2022, the
Group’s subordinated debt and cash would reduce by
approximately $1.61 billion, with no impact on the Group’s
net assets or shareholders’ equity.
On a net basis, the Offer of the Notes and the redemption
of all of the CN2 would reduce the Group’s subordinated
debt and cash by approximately $625 million. The Offer
of the Notes and the redemption of all of the CN2 will not
have a material impact on the Group’s financial position.
The impact has been prepared in accordance with the
measurement and recognition requirements of Australian
Accounting Standards and other mandatory reporting
requirements in Australia.
If ANZ raises more or less than $1 billion under the Offer,
the figures referred to above will be impacted accordingly.
5.4 CAPITAL ADEQUACY
5.4.1 Prudential regulation
APRA is the prudential regulator of the Australian financial
services industry.
ANZ is regulated by APRA because of its status as an
ADI. APRA’s Prudential Standards aim to ensure that ADIs
(including ANZ) remain adequately capitalised to support
the risks associated with their activities, absorb losses and
to generally protect Australian depositors.
To ensure that ADIs are adequately capitalised on both
a standalone and group basis, APRA adopts a tiered
approach to the measurement of an ADI’s capital adequacy
by assessing the ADI’s financial strength at three levels:
•Level 1 – the ADI on a standalone basis (i.e. ANZ and
specified subsidiaries which are considered to form
the ADI’s Extended Licensed Entity). This is the ANZ
Level 1 Group;
•Level 2 – the consolidated banking group (i.e. the
consolidated group less certain subsidiaries and
associates that are excluded under APRA’s Prudential
Standards). This is the ANZ Level 2 Group; and
•Level 3 – the conglomerate group at its widest level;
that is, ANZ and all its related bodies corporate.
This would also include a NOHC if applicable.
ANZ must also comply with a common framework
issued by the Basel Committee for the calculation of
capital adequacy, and the risk weighting of assets, for
banks worldwide (the Basel Framework). The objective
of the Basel Framework is to develop capital adequacy
guidelines that are more accurately aligned with the
individual risk profile of banks.
The Basel Framework requires ADIs to hold a certain level
of regulatory capital against its risk weighted assets (RWA).
An ADI calculates its RWA number by weighting its assets
(through applying a percentage factor) to reflect the risk
of loss to the ADI from those assets, in particular from
non-payment.
For more information on ANZ’s and the Group’s capital
ratios as at 31 December 2021 and the effect of the Offer,
see Sections 5.4.6 and 5.4.7.
5.4.2 Basel III Framework
ANZ has been accredited by APRA to use the Advanced
Internal Ratings Based (IRB) methodology for calculating
credit RWA, the Internal Models Approach (IMA) for market
risk including interest rate risk in the banking book (IRRB)
and the Advanced Measurement Approach for calculating
the operational RWA equivalent. The credit risk weightings
for a bank accredited to use the IRB methodology are
generally lower than the weightings applied to a bank
that does not have that accreditation and so must
use a standard set of risk weightings set by APRA
(the standardised approach). APRA views Basel III
requirements as a minimum standard and has accordingly
set higher requirements in some areas for ADIs using the
IRB methodology (IRB ADIs).
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5.4.3 Prudential Capital Classification
APRA currently classifies an ADI’s regulatory capital
into three tiers for supervisory purposes – referred to as
Common Equity Tier 1 Capital, Additional Tier 1 Capital
and Tier 2 Capital.
Common Equity Tier 1 Capital comprises the highest
quality components of capital and includes shareholders’
equity adjusted for items which APRA does not allow as
regulatory capital or classifies as lower forms of regulatory
capital. The ratio of Common Equity Tier 1 Capital to RWA
is called the Common Equity Capital Ratio.
Additional Tier 1 Capital comprises certain securities
not classified as Common Equity Tier 1 Capital but with
loss absorbing characteristics including that, at the time
of “non-viability” of an ADI, these instruments will be either
converted to ordinary shares or written off (such as ANZ
Capital Securities and the ANZ Capital Notes 6). Additional
Tier 1 Capital together with Common Equity Tier 1 Capital
constitutes Tier 1 Capital and the ratio of Tier 1 Capital to
RWA is called the Tier 1 Capital Ratio.
Tier 2 Capital consists of subordinated instruments and,
whilst a lesser form of capital than Tier 1 Capital, still has
a capacity to absorb losses and contributes to the overall
capital framework. Tier 2 Capital will also be converted to
ordinary shares or written off at the time of 'non-viability'
of an ADI. Tier 2 Capital together with Tier 1 Capital
constitutes Total Capital and the ratio of Total Capital
to RWA is called the Total Capital Ratio.
APRA has confirmed that the Notes will constitute
Additional Tier 1 Capital for the purposes of ANZ’s
regulatory capital requirements.
5.4.4 APRA's Common Equity Capital
Ratio requirements
Minimum Capital Ratios
Subject to APRA’s changes to its capital requirements
discussed in section 5.4.5 below, APRA’s Basel III Prudential
Standards currently require a minimum Common Equity
Capital Ratio of 4.5%, although APRA may require ADIs,
such as ANZ, to maintain a higher capital ratio which may
not be disclosed (Prudential Capital Ratio or PCR). APRA
also currently requires ADIs to hold Common Equity Tier 1
Capital buffers (Combined Capital Buffers) consisting of:
•a capital conservation buffer (CCB) of 2.5%, unless
APRA determines otherwise; plus
•an additional capital buffer of 1.0% from 1 January 2016
given APRA has determined that ANZ is an important
bank to the Australian financial system (otherwise
known as a ‘domestic systemically important bank’
or a D-SIB); plus
•a counter-cyclical capital buffer (CCyB). In respect of
Australian exposures the buffer is currently 0%, although
it may vary over time up to 2.5% in response to market
conditions and APRA has provided guidance that the
CCyB would be set at the default rate of 1.0% for Australia
on the commencement of the new capital framework
on 1 January 2023 (refer to section 5.4.5 below).
Regulators in some jurisdictions in which ANZ operates
have set counter-cyclical capital buffers that apply to
exposures in that jurisdiction, and as such apply to ANZ.
As at 31 December 2021, the weighted average
aggregate of non-Australian counter-cyclical capital
buffers that apply to ANZ was 0%.
Volatility in the Common Equity Capital Ratios can be
expected to arise in the future reflecting the build-up of
current year earnings in normal conditions which increase
the ratio and the subsequent payment of Ordinary Share
Dividends (generally in July and December of each year)
which decrease the ratio.
References to the minimum capital ratio, which is the
aggregate of the PCR and the Combined Capital Buffers
(Minimum Capital Ratio), applicable under APRA’s
Prudential Standards are to general minima applying
under the APRA Prudential Standards, rather than
specific minima applying to ANZ.
The differences between the Common Equity Capital
Ratios for the ANZ Level 1 Group and ANZ Level 2 Group
relate principally to the capital held within offshore
banking subsidiaries and the treatment of insurance and
funds management subsidiaries at Level 1. So long as ANZ
is able to apply the Group's capital management strategy
to those subsidiaries, including repatriating dividends
from those subsidiaries (with the approval of the local
regulator), ANZ would expect that those capital ratios
would move in a similar way. However, there are instances
where the Level 1 and Level 2 capital ratios may diverge
and regulatory developments (such as those described
below) may increase the divergence.
The ANZ Level 1 Group's Common Equity Capital Ratio
has been impacted by the reduced dividends from its
New Zealand subsidiary as a result of the RBNZ’s restrictions
on the amount of dividends that New Zealand banks could
pay as well as the RBNZ’s requirements for New Zealand
banks to hold more capital. The Level 1 and Level 2
Common Equity Capital Ratios may also diverge further
as APRA’s proposed revisions to the capital treatment of
an ADI’s banking and insurance subsidiaries at Level 1
are implemented. These regulatory developments are
described in more detail in section 5.4.5 below.
Restrictions on the Payment of Distributions
If the Common Equity Capital Ratio for an ADI on a Level 1
or Level 2 basis falls below the Minimum Capital Ratio,
which is currently 8% under APRA’s Prudential Standards
for a D-SIB (although it may be higher for individual ADIs),
then the ADI is limited in the amount of relevant current
year post-tax earnings (adjusted to add back expenses for
Tier 1 Capital Distributions (as defined below) paid in the
immediately preceding 12 months) that it can pay as
discretionary bonuses to staff; distributions on Additional
Tier 1 Capital instruments (including the Notes) and
dividends and share buy-backs on Ordinary Shares
(Tier 1 Capital Distributions).
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The amount of adjusted current year post tax earnings that can be paid as Tier 1 Capital Distributions (including Distributions
on the Notes) (Maximum Distributable Amount) is limited in accordance with the table below, after taking into account
other Tier 1 Capital Distributions paid in the 12-month period immediately preceding the relevant payment date and actual
and forecast capital raisings agreed with APRA.
The Combined Capital Buffer is divided into four quartiles for determining the maximum percentage of adjusted current year
post-tax earnings that an ADI is able to distribute when its Common Equity Capital Ratio falls within the relevant quartile:
Common Equity Capital RatioMaximum Distributable Amount
Above the top of the Combined Capital Buffers
(>PCR + Combined Capital Buffers)
100%
Within the fourth quartile of the Combined Capital Buffers
(>PCR +0.75% of the Combined Capital Buffers to ≤PCR +
Combined Capital Buffers)
60%
Within the third quartile of the Combined Capital Buffers
(>PCR +0.50% of the Combined Capital Buffers to ≤PCR + 0.75% of
the Combined Capital Buffers)
40%
Within the second quartile of the Combined Capital Buffers
(>PCR +0.25% of the Combined Capital Buffers to ≤PCR + 0.50% of
the Combined Capital Buffers)
20%
Within the first quartile of the Combined Capital Buffers
(PCR to ≤PCR + 0.25% of the Combined Capital Buffers)
0%
An ADI may apply to APRA to make payments in excess of the Maximum Distributable Amount. APRA will only grant
approval where it is satisfied that an ADI has established measures to raise capital equal to or greater than the amount above
the constraint that it wishes to distribute. Australian Corporations law does not limit the sources of payment of Distributions
on the Notes to the profits of a particular year or period.
The Minimum Capital Ratio for a D-SIB, and so the point at which the Maximum Distributable Amount applies, may increase as
a result of the APRA capital reforms referred to in section 5.4.5 below. Section 5.4.5 also sets out the implications of any increase.
5.4.5 Regulatory Developments
Unquestionably strong capital requirements
The Australian Government completed a comprehensive inquiry into Australia’s financial system in 2014 (the Financial
Services Inquiry or FSI) which included a number of key recommendations that could have an impact on regulatory
capital levels. APRA's key initiatives in support of the recommendations include:
•In July 2017, APRA released an information paper outlining its assessment on the additional capital required for the
Australian banking sector to be considered ‘unquestionably strong’ as originally outlined in the FSI final report in
December 2014. APRA indicated that in the case of the four major Australian DSIBs, this equated to a benchmark Common
Equity Capital Ratio, under the current capital adequacy framework, of at least 10.5% from 1 January 2020.
•APRA released its final requirements in relation to capital adequacy and credit risk capital requirements for ADIs in
November 2021 for implementation from January 1, 2023 (APRA capital reforms). This follows the consultation process
that began in December 2020 when APRA released a consultation paper regarding proposed changes to the capital
framework for ADIs aimed at embedding “unquestionably strong” levels of capital, improving the flexibility of the
framework, and improving the transparency of ADI capital strength. Key aspects of APRA's final requirements are:
−increased alignment with internationally agreed Basel standards for non-residential mortgages exposures;
−implementing more risk-sensitive risk weights for residential mortgage lending;
−introduction of the Basel II capital floor that limits the RWA outcome for IRB ADIs to no less than 72.5% of the RWA
outcome under the standardised approach;
−improving the flexibility of the capital framework through the introduction of a default level of the countercyclical capital
buffer (“CCyB”) and increasing the capital conservation buffer (“CCB”) for IRB ADIs. This will have the effect of increasing the
Minimum Capital Ratio (incorporating the higher Combined Capital Buffers) from 8% to approximately 10 to 10.25%,
although the final outcome is uncertain and subject to the finalisation of the APRA capital reforms requirements;
−improving the transparency and comparability of ADIs' capital ratios, including by requiring IRB ADIs
to also publish their capital ratios under the standardised approach; and
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−implementing a minimum leverage ratio for IRB ADIs
at 3.5%. APRA's “Leverage Ratio” compares Tier 1
Capital to the “exposure measure” (expressed as a
percentage) as defined by APRA Prudential Standard
APS110. It is designed as a non-risk based
supplement or backstop to the current risk based
capital requirements and is intended to restrict the
build-up of excessive leverage in the banking system.
APRA has indicated that the above changes will likely
result in a decrease in RWA, but this will be offset by the
increased capital allocation to the Combined Capital
Buffers. APRA has also indicated that, as ADIs are currently
meeting the “unquestionably strong” benchmarks, it is not
APRA's intention to require ADIs to raise additional capital.
Accordingly, APRA has therefore sought to calibrate
the proposed capital requirements for ADIs, measured in
dollar terms, to be consistent at an industry level with the
existing “unquestionably strong” capital benchmarks for
ADIs under the current capital framework. The impact
of these proposed changes on individual ADIs (including
ANZ), however, will vary depending on the final form of
requirements implemented by APRA and outcomes of the
applicable model accreditation process with APRA.
As such, subject to finalisation of the APRA capital reform
requirements, the impact of these changes on the excess
Common Equity Tier 1 Capital that ANZ holds at any time for
both the Level 1 and Level 2 Groups over the following
Common Equity Tier 1 ratio benchmarks are as follows:
•the excess over 5.125%, which is the point at which
a Common Equity Capital Trigger Event would occur,
may increase; and
•the excess over the point at which the Maximum
Distributable Amount starts, may be reduced mainly
reflecting the increased regulatory capital buffer
requirements.
However, APRA also stated that “capital buffers are
designed to allow for banks to operate within the
regulatory buffer range in periods of stress, to absorb
losses and continue lending without breaching minimum
requirements: this is the intent of the capital framework.
Regulatory buffers can be used if needed, and APRA does
not expect banks to maintain targets above the buffer
range in a severe stress".
APRA’s proposed revisions to ADI’s
capital adequacy requirements
In August 2021, APRA released the final version
of prudential standard APS111 Capital Adequacy:
Measurement of Capital, which came into effect on
1 January 2022. The most material change from the
current APS111 is in relation to the treatment of capital
investments for each banking and insurance subsidiary at
Level 1 with the tangible component of the investment
changing from a 400% risk weighting to:
•a 250% risk weighting up to an amount equal to 10%
of ANZ’s net Level 1 Common Equity Tier 1 Capital; and
•the remainder of the investment being treated as
a Common Equity Tier 1 Capital Deduction.
ANZ is reviewing the implications for its current investments.
The net impact on the Group is unclear and will depend
upon a number of factors including:
•the capitalisation of the affected subsidiaries at
the time of implementation; and
•the effect of management actions being pursued
that have the potential to materially offset the impact
of these changes.
Based on ANZ’s current investment in its affected
subsidiaries and in the absence of any offsetting
management actions, the implementation of these changes
imply a reduction in the Common Equity Capital Ratio of
the ANZ Level 1 Group of up to approximately $2.5 billion
(approximately 0.7%). However, ANZ believes that this
outcome is unlikely and, post-implementation of the
management actions, the net capital impact could be
minimal. There is no impact on the Common Equity Capital
Ratio for the ANZ Level 2 Group arising from these changes.
The RBNZ review of capital requirements
In December 2019, the RBNZ announced its capital review
policy decisions for New Zealand banks. In November
2020, the RBNZ released for consultation its draft Banking
Prudential Requirements for these capital policy changes.
The key requirements include:
•a tier 1 capital requirement of 16% of RWA for ANZ's
New Zealand banking subsidiary ANZ Bank New Zealand
Limited (ANZ New Zealand) of which up to 2.5% of this
could be in the form of additional tier 1 capital. ANZ
New Zealand’s total capital requirement remains at 18%
of RWA of which up to 2% can be tier 2 capital;
•redeemable preference shares are allowable as
additional tier 1 capital;
•increasing RWA outcomes for IRB banks to
approximately 90% of what would be calculated
under the standardised approach; and
• implementation over a transition period concluding
on 1 July 2028.
The net impact on the Group is expected to be an
increase in required Common Equity Tier 1 Capital of
approximately $1 billion between 30 September 2021
and the end of the transition period in 2028 (based on
the Group’s 30 September 2021 balance sheet). This
amount could vary over time subject to changes to capital
requirements in ANZ New Zealand (for example, from
RWA growth or management buffer requirements),
potential dividend payments and the final form of
implementation of APRA’s prudential standard APS111
Capital Adequacy: Measurement of Capital.
RBNZ announcement on actions to support
the banking system
In April 2020, the RBNZ announced that to further support
the stability of the financial system during the period of
economic uncertainty brought about by the COVID-19
pandemic, New Zealand’s retail banks agreed with the
RBNZ that during that period there would be no payment
of dividends on ordinary shares and that they should not
redeem non-common equity tier 1 capital instruments.
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In March 2021, the RBNZ announced that these restrictions on dividends and the redemption of non-common equity tier 1
capital instruments would be eased. As a result, ANZ New Zealand is now able to pay up to 50% of its earnings as dividends
to shareholders. These restrictions will remain in place until 1 July 2022, at which point the RBNZ intends to remove the
restrictions, subject to prevailing economic conditions.
APRA Guidance on Capital Management
In response to the COVID-19 pandemic, APRA provided guidance on capital management, including as to its expectations
in relation to dividends. In December 2020, APRA updated its guidance, whereby from the 2021 calendar year, APRA will no
longer hold ADIs to a minimum level of earnings retention but ADIs will need to maintain vigilance and careful planning in
capital management, including conducting regular stress testing and assurance on the capacity to continue to lend. APRA
also stated that the onus will be on boards to carefully consider the sustainable rate for dividends, taking into account the
outlook for profitability, capital and economic environment.
The impact of regulatory developments is uncertain
Given the number of items that are yet to be finalised by APRA and the RBNZ, the final outcome of APRA's Unquestionably
Strong capital requirements and any further changes to APRA’s or the RBNZ's prudential standards, the impact of these
regulatory developments on the Group remains uncertain.
5.4.6 The ANZ Group’s Common Equity Capital Ratio
The Common Equity Capital Ratios of the ANZ Level 1 and Level 2 Groups were 11.2% and 11.6% at 31 December 2021
respectively. The December 2021 position incorporates the impacts from payment of the Final 2021 Group dividends, amongst
other movements in the capital base. At 30 September 2021, the Common Equity Capital Ratios of the ANZ Level 1 and Level 2
Groups were 12.0% and 12.3% respectively.
ANZ is currently targeting a Common Equity Capital Ratio above 10.5%, although this may change following finalisation
of the regulatory developments referred to in section 5.4.5 above. ANZ gives no assurance as to what its Common Equity
Capital Ratio for the ANZ Level 1 Group or ANZ Level 2 Group will be at any time. These ratios may be significantly impacted
by the currently proposed or future regulatory changes, unexpected events affecting ANZ's business, operations and
financial condition, any acquisitions or capital reductions and by APRA’s prescriptions for the determination of the ratios
at Level 1 or Level 2. Following the finalisation of the prudential standards described in section 5.4.5 above, ANZ's Common
Equity Capital Ratios, and the buffers of Common Equity Tier 1 Capital ANZ holds above the Common Equity Capital Trigger
and Minimum Capital Ratio, may differ from current levels.
ANZ announced on 19 July 2021 that it intended to buy-back up to $1.5 billion of its Ordinary Shares on-market as part
of its capital management plan. As at 31 January 2022, ANZ had bought back $1.015 billion of its Ordinary Shares. On
7 February 2022, ANZ announced that its capital position continues to provide flexibility to return further surplus capital to
shareholders and that ANZ is considering increasing the size of its current on-market buy-back which would have the effect
of reducing ANZ's Common Equity Capital Ratios. Any decision to return surplus capital will balance the importance of capital
efficiency against maintaining an appropriately strong balance sheet and continued monitoring of the economic situation.
As at 31 December 2021, ANZ had $2.8 billion and $4.9 billion of Common Equity Tier 1 Capital for the ANZ Level 1 Group
and ANZ Level 2 Group respectively in excess of 10.5%. The 31 December 2021 capital position incorporates the impacts from
payment of the Group’s 2021 Final dividend of 72 cents per share (equivalent to $2.0 billion in Common Equity Tier 1 Capital).
The Common Equity Tier 1 Capital in excess of 10.5% is reduced to $2.2 billion and $4.4 billion respectively if adjusted
for $588 million of the outstanding on-market share buyback at 31 December 2021 required to complete the $1.5 billion
amount announced on 19 July 2021.
However, assuming ANZ had a Level 1 and Level 2 Common Equity Capital Ratio of 10.5% as at 31 December 2021, this
would have equated to approximately $21.2 billion and $23.2 billion of surplus Common Equity Tier 1 Capital for the ANZ
Level 1 Group and ANZ Level 2 Group respectively in excess of a Common Equity Tier 1 Capital Ratio of 5.125% which is the
point at which a Common Equity Capital Trigger Event would occur.
The graphs below show ANZ's current and historic Common Equity Capital Ratios at Level 1 and Level 2, highlighting the
amount of Common Equity Tier 1 Capital held (in percentage terms):
•between the current Minimum Capital Ratio of 8.0% and 10.5%; and
•between 10.5% and ANZ's actual Common Equity Tier 1 Capital applying at that time.
Currently, the Common Equity Capital Ratio for the ANZ Level 1 Group is lower than for the ANZ Level 2 Group and so is
the binding constraint when considering the impact of certain actions on ANZ’s capital ratios. However, in the future and
in certain circumstances the Level 2 ratio may become the binding constraint.
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5.4.7 Proforma consolidated capital adequacy position as at 31 December 2021
The purpose of the proforma capital adequacy ratios set out in the table below is to present the regulatory capital adequacy
position of the ANZ Level 2 Group as at 31 December 2021 adjusted for the effect of the proposed issue of $1 billion of Notes
under the Offer net of a redemption of the $1.61 billion of CN2 on 24 March 2022.
In the proforma adjustments contained in the table below:
•the fourth and fifth columns show the reduction in the 31 December 2021 capital adequacy ratios adjusting for
the completion of the $1.5 billion of on-market share purchase announced on 19 July 2021, of which $588 million
(of the $1.5 billion) remained outstanding as at 31 December 2021;
• the sixth and seventh columns show the reduction in the capital adequacy ratios if all the CN2 were redeemed;
•the eighth column shows the impact of the Offer of $1 billion of Notes less Common Equity Tier 1 Capital Deductions
of approximately $15 million, being the estimated costs of the Offer; and
•the last column shows the net effect of all of the above adjustments on the 31 December 2021 capital adequacy ratios.
If there is an over or under-subscription for the Notes, the Tier 1 Capital Ratio and Total Capital Ratio will be adjusted for
the amount of the over or under-subscription and associated transaction costs. ANZ’s capital adequacy ratios will also be
impacted by organic capital growth, changes in provisions and RWA growth since 31 December 2021.
ANZ’S SUMMARISED CONSOLIDATED CAPITAL ADEQUACY RATIOS AS AT 31 DECEMBER 2021
ANZ Level 2
Group
1
ANZ
30 Sep-
tember
2021
ANZ
31 Dec-
ember
2021
2
Proforma
adjustment:
Completion of
SBB
Proforma ANZ
31 December
2021 after the
Completion of
SBB
Proforma
adjustment:
CN2
Redemption
Proforma
ANZ 31
December
2021 after
the CN2
Redemption
Proforma
adjustment:
CN7 issue
Proforma
ANZ 31
December
2021 net of
all Proforma
Adjustments
Common Equity
Capital Ratio
12.3%11.6%-0.1%11.5%0.0%11.5%0.0%11.5%
Additional Tier 1
Capital Ratio
2.0%1.8%0.0%1.8%-0.4%1.4%0.2%1.7%
Tier 1 Capital14.3%13.5%-0.1%13.3%-0.4%13.0%0.2%13.2%
Total
Capital Ratio
18.4%17.4%-0.1%17.2%-0.4%16.9%0.2%17.1%
1 The capital adequacy ratios contained in this table have been rounded to the nearest decimal place. Any discrepancies in the sum of the ratios in this table are
due to rounding.
2 The summarised consolidated capital adequacy ratios of the ANZ Level 2 Group as at 31 December 2021 are extracted from the ANZ Basel III Pillar 3 Disclosure
as at 31 December 2021 (which are not subject to KPMG’s audit or review processes).
LEVEL 2
Sep 16
Mar 17
Sep 17
Mar 18
Sep 18
Mar 19
Sep 19
Mar 20
Sep 20
Mar 21Dec 21
Sep 21
Dec 21 PF
1
Dec 21
Sep 21
Dec 21 PF
1
12
14
% Common Equity Capital Ratio
10
8
6
4
2
0
LEVEL 1
Sep 16
Mar 17
Sep 17
Mar 18
Sep 18
Mar 19
Sep 19
Mar 20
Sep 20
Mar 21
APRA’s minimum Common Equity Tier 1 Capital Ratio
Combined Capital Buers
Common Equity Tier 1 Capital (%) between 8% and 10.5%
Common Equity Tier 1 Capital (%) in excess of 10.5%
12
14
% Common Equity Capital Ratio
10
8
6
4
2
0
1 Dec 21 PF – December 21 reported Common Equity Capital Ratio on a pro-forma basis adjusted for $588m of share buy back outstanding to complete the
announced $1.5bn of buy back.
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