Sydney, 26 November 2010
Further to the announcement on 23 November, Macquarie Group Limited (MGL) advises that it has priced the issue of US$400 million of Preferred Membership Interests (PMIs). The PMIs are expected to be issued on 2 December 2010.
The PMIs, to be issued by Macquarie PMI LLC, a controlled subsidiary of Macquarie Group, will pay a distribution of 8.375% per annum fixed for the life of the PMIs, payable semi-annually in arrear. The distributions are subject to payment tests, including the discretion of the Issuer and MGL as to whether payments should be made. If no distributions are paid on the PMIs, a dividend stopper will apply to MGL ordinary shares. The dividend stopper would apply until all unpaid distributions for the preceding 12 months have been paid in full.
The PMIs will be redeemable, subject to APRA approval, at the discretion of the Issuer after 5 years. If not redeemed after 25 years, the PMIs will be exchanged for preference shares in MGL with terms which are substantially similar to the PMIs. Additionally, MGL has the discretion at any time to exchange the PMIs for preference shares in MGL on substantially similar terms to the PMIs.
APRA has confirmed that the PMIs meet the requirements of eligible hybrid capital under the current regulatory framework of MGL. In addition, APRA has confirmed that, at a minimum, the PMIs will be eligible for the same transitional relief that will be available for eligible instruments of banks.
Macquarie Group Limited Chief Financial Officer Greg Ward said: "The issue of PMIs is being made as part of Macquarie’s ongoing funding and capital management strategy. This issue further diversifies the funding mix of the Group and takes advantage of the strong demand in Asian and European markets for Macquarie’s credit."
THIS STATEMENT DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES FOR SALE IN ANY JURISDICTION.
THERE IS NO PUBLIC OFFER OF THE PMIS.
THE PMIs HAVE NOT BEEN NOR WILL BE REGISTERED UNDER THE U.S. SECURITIES ACT OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE PMIs MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT) UNLESS THE PMIs ARE REGISTERED UNDER THE U.S. SECURITIES ACT OR OFFERED AND SOLD PURSUANT TO AND IN ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.