Macquarie to raise $289m Tier 1 for bank unit
Macquarie Group plans to raise around AUD 400m ($289m) of hybrid securities to maintain a diverse source of funding; the offer consists of perpetual, subordinated notes that will contribute additional Tier 1 to the issuer's unit, Macquarie Bank. This is the second time in two months that Macquarie has tapped investors, and follows a busy period of equity raisings by Australia's major banks in the past few months.

Macquarie Group has kicked off an attractively priced $400 million hybrid issue, as the firm attempts to circumvent investor fatigue for bank raisings and concerns about volatility in the hybrid market.

Details of the hybrid issue were revealed by Street Talk on Thursday. The company outlined the specifics of the Macquarie Group Capital Notes 2 offer in a statement to the Australian Securities Exchange on Monday.

The bookbuild and announcement of the margin for the Macquarie notes is scheduled to occur on Friday. Credit: Grant Turner

The hybrid issue marks the second time in two months that Macquarie has tapped investors and follows a frenetic period of equity raisings by the major banks in the past six months.

Macquarie said the capital notes will qualify as eligible regulatory capital with the Australian Prudential Regulation Authority, and the firm has the ability to raise more or less than the slated $400 million. The notes will be priced at a margin of 5.15 per cent to 5.35 per cent over the 180-day bank bill swap rate. They have a mandatory conversion date of March 18, 2024, and three earlier optional call dates at Macquarie's discretion.