Westpac Banking Corporation (ASX:WBC) has issued US$750,000,000 in 6.252% Fixed Rate Subordinated Notes due 13 November 2037, with the securities expected to qualify as Tier 2 regulatory capital under the Basel III framework as implemented by the Australian Prudential Regulation Authority (APRA).

Key Points

  • Westpac issued US$750,000,000 of 6.252% Fixed Rate Subordinated Notes on 13 November 2026, maturing 13 November 2037.
  • The notes are expected to be treated as Tier 2 regulatory capital under APRA's Basel III framework.
  • Proceeds, less costs of issue, are expected to increase Westpac's total capital ratio on a Level 2 basis by less than 0.3%.
  • The Maximum Conversion Number is 40,203.2034 Westpac ordinary shares per Subordinated Note, based on an Issue Date VWAP of A$36.34.
  • Proceeds will be used for general corporate purposes and classified as loan capital in Westpac's financial statements.

Subordinated Notes Issuance Terms

Westpac issued the Subordinated Notes on 13 November 2026 under its US$50,000,000,000 US Medium-Term Note Program, with terms set out in an Offering Memorandum dated 2 November 2026 and a Pricing Supplement dated 5 November 2026. The filing states that the issue will not have a material impact on Westpac's financial position. Proceeds, less the costs of issue, will be classified as loan capital in Westpac's financial statements and used for general corporate purposes. The filing was authorised for release by Sarah Donnelly, Company Secretary, and includes a cleansing notice under section 708A(12H)(e) of the Corporations Act 2001.

Non-Viability Conversion and Write-Off Provisions

Under the terms of the Subordinated Notes, if APRA determines that Westpac is or would become non-viable, the notes may be converted into fully paid ordinary shares in Westpac or, if conversion does not occur within five ASX Business Days of APRA's notification, immediately and irrevocably written off with all rights terminated. The filing states that non-viability could include serious impairment of Westpac's financial position and concerns about its capital, funding or liquidity levels and/or insolvency, and that APRA has indicated non-viability is likely to arise prior to insolvency. APRA has not provided extensive guidance on how it would determine non-viability.

Maximum Conversion Number and Ordinary Share Terms

The Maximum Conversion Number applicable to the Subordinated Notes is 40,203.2034 Westpac ordinary shares per Subordinated Note, with denominations of US$200,000, calculated based on a volume-weighted average price (VWAP) set to reflect 20% of the Issue Date VWAP of A$36.34. The filing notes the Maximum Conversion Number may be adjusted for consolidations, divisions, reclassifications or pro rata bonus issues of ordinary shares, but no adjustment will be made for other transactions such as rights issues, returns of capital, buy-backs or special dividends. If conversion occurs, loan capital would be reduced and shareholders' equity increased by a corresponding amount.