Macquarie Group Limited (MGL)
Offering Circular for a Debt Instrument Programme dated 14 June 2017
Dated 12 December 2017
Nature of the Bonds
Instruments and any relative Coupons will be direct, unsecured, unsubordinated, and general obligations of MGL that will rank pari passu, without any preference among themselves, with all other outstanding unsecured, unsubordinated obligations of MGL, present and future (other than obligations preferred by mandatory provisions of law).
15 December 2017
15 December 2027
Interest Rate and Interest Payment Dates
4.15% per annum, payable semi-annually (in two coupons of 2.075%) in arrears on 15 June and 15 December in each year, including the Maturity Date.
Repayment at Par on the Maturity Date
On the Maturity Date, bondholders are scheduled to receive the Face Value and the final Coupon Payment for the last Interest Period.
The value of an investment in the bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect MGLs financial performance. The following risks may also affect an investment in the bonds:
- Lack of liquidity in the secondary market for the bonds;
- Liquidity risks - MGL may be unable to meet their obligations when they fall due to a mismatch in cash flows;
- Funding risk - if capital markets are unstable, MGL may not be able to refinance the bonds in a timely or efficient manner;
- Interest rate risks – Bondholders may suffer unforeseen losses due to fluctuations in interest rates;
- Regulatory risks – Global economic conditions have led to changes that significantly alter the regulatory framework in which MGL and the Macquarie Group operate leaving MGL exposed to risk of regulatory scrutiny and sanctions in circumstances of breaches or non-compliance;
- Litigation risks – Risks relating to litigation and regulatory actions;
- Credit rating risks - Certain Macquarie Group entities are assigned credit ratings based on an evaluation of a number of factors. If one or more of these credit ratings are downgraded this could have the effect of increasing the cost of funds raised by MGL or the Macquarie Group from financial markets, reducing MGLs or the Macquarie Groups ability to access certain capital markets, triggering MGLs or the Macquarie Groups obligations under certain contracts, and/or adversely impacting the willingness of counterparties to deal with MGL or the Macquarie Group;
- Operational risks – The risk of loss resulting from inadequate internal processes and controls, people and systems or from external events;
- Default risk – if an event of default occurs under the bonds, or MGL fails to perform any obligation in relation to the bonds, such event or failure may impact on the value of an investment in the bonds, the transferability of the bonds and the ability of a holder to recover amounts due under the bonds.
Key benefits include:
- Approximately 7 years remaining until Maturity Date;
- Interest paid semi-annually in arrears;
- Interest paid is fixed rate;
- Interest paid as 100% cash;
- Interest is not deferrable nor are interest payments discretionary;
- Rank equally with all other senior and unsecured creditors of the Issuer.
Early Redemption by Issuer
Yes, for tax reasons.
Early Redemption by Bondholder
Bondholders of debit instruments may require the issuer to redeem the bonds upon occurrence of an Event of Default.
So long as any of the bonds remain outstanding, the Issuer will not, unless approved by an Extraordinary Resolution, create or permit to subsist any mortgage, charge, pledge, lien or other form of encumbrance or security interest (Security Interest) upon the whole or any part of its present or future assets or revenues or those of any of its Subsidiaries (as defined below) as security for any relevant indebtedness (as defined below) or any guarantee or indemnity (Guarantee) given in respect of any relevant indebtedness unless prior to or simultaneously therewith, the Issuer either:
- Grants or procures to be granted a Security Interest or Security Interests securing its obligations under the bonds and the relative Coupons which will result in such obligations being secured equally and rateably in all respects so as to rank pari passu with the applicable relevant indebtedness or Guarantee; or
- Grants or procures to be granted such other Security Interest or Security Interests in respect of its obligations under the bonds and the relative Coupons as shall be approved by an Extraordinary Resolution.
Events of Default
Events of Default include:
- Non-payment: The Issuer fails to pay any principal or any interest within 14 days of the relevant due date; or
- Other obligations: The Issuer defaults in performance or observance of or compliance with any of its other obligations set out in the bonds which default with a 21-day cure period;
- Illegality: It is or will become unlawful for the Issuer to perform or comply with any one or more of its obligations;
- Winding up: An application (other than a frivolous or vexatious application or an application which is discharged or stayed within 21 Business Days) or an order is made or the winding-up of the Issuer or a resolution is passed for the winding-up of the Issuer other than for the purposes of a solvent reconstruction or amalgamation; or
- Receiver: A receiver, receiver and manager, administrator, liquidator, official manager, trustee or similar officer is appointed in respect of all or any part of the assets of the Issuer and such appointment is not terminated within 21 Business Days; or
- Cessation of business: The Issuer ceases or threatens to cease to carry on its business or ceases or threatens to cease payment of its debts generally; or
- Insolvency: The Issuer is unable to pay its debts when they fall due or is deemed unable to pay its debts.
Coupon Schedule to Maturity
- 15 December 2020
- 15 June 2021
- 15 December 2021
- 15 June 2022
- 15 December 2022
- 15 June 2023
- 15 December 2023
- 15 June 2024
- 15 December 2024
- 15 June 2025
- 15 December 2025
- 15 June 2026
- 15 December 2026
- 15 June 2027
- 15 December 2027 - Maturity Date