Overview

MIPS tender offer and net movement in fair value adjustment on fixed rate issued debt and subordinated debt

19 June 2009

Macquarie Group Limited (ASX MQG) advises that it has completed a tender offer for Macquarie Bank Limited’s Income Preferred Securities (MIPS) and provides an update on the fair value impact of the net movement in the value of fixed rate issued debt and subordinated debt.

Under the tender offer for the outstanding MIPS, MQG has secured approximately £157 million ($A324 million) of MIPS, out of a total £200 million currently outstanding, at a 40% discount to face value. The successful completion of this tender offer will result in MQG booking a realised profit (pre profit share and tax) of approximately $A130 million in FY10.

The realised profit from the MIPs tender offer largely offsets the negative impact in the income statement from the net movement in the fair value of Macquarie Bank Limited’s (MBL) fixed rate issued debt and subordinated debt which has increased in value since 31st March 2009 (notwithstanding some recent profitable buybacks) due to a reduction in MBL credit spreads.

It should be noted that the value of the fixed rate issued debt and subordinated debt will change in line with movements in MBL credit spreads and such movements will impact future earnings accordingly.

Contacts:

Stuart Green
Investor Relations
Macquarie Group
Tel: (612) 8232 5008
Email: stuart.green@macquarie.com

Paula Hannaford
Corporate Communications
Macquarie Group
Tel: (612) 8232 4102
Email: paula.hannaford@macquarie.com

Karen Khadi
Investor Relations
Macquarie Group
Tel: (612) 8232 3548
Email: karen.khadi@macquarie.com