ANZ's US hybrid attracts "massive" US$18b demand + delivers 2% capital gains

Christopher Joye

Coolabah Capital

ANZ's landmark US dollar hybrid deal, the first of its kind launched by an Australian bank in nearly a decade, attracted an extraordinary US$18 billion ($24 billion) of demand at very tight spreads in the book-build from global investors overnight. Deal participants described demand as "massive" with ANZ only printing US$1 billion of the perpetual "additional tier one capital" (AT1) securities, which contribute to ANZ's tier one equity capital ratio. Tier one capital is made up of ordinary common equity capital and AT1 hybrids. In transactions of this kind, book-build bids are often inflated artificially to secure priority allocations, which means the $US18 billion of demand overstates the true level of investor interest. In secondary trading following the deal's close, marketmakers reported bids at around $US101.50 implying ANZ's investors had captured immediate 1.5 per cent capital gains. Free (VIEW LINK)


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Christopher Joye
Portfolio Manager & Chief Investment Officer
Coolabah Capital

Chris co-founded Coolabah in 2011, which today runs $7 billion with a team of 33 executives focussed on generating credit alpha from mispricings across fixed-income markets. In 2019, Chris was selected as one of FE fundinfo’s Top 10 “Alpha...

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