Westpac Banking Corporation (“Westpac”)
Debt Issuance Programme dated 5 March 2014
Dated 19 January 2015
Nature of the Bonds
Direct, unconditional, unsubordinated and unsecured obligations of Westpac and rank equally without any preference among themselves and, in a Winding-Up, at least equally with all other unsubordinated and unsecured obligations of Westpac, present and future, save for certain mandatory exceptions provided by law.
The bonds are not protected accounts for the purposes of the Banking Act. In addition, the bonds are not guaranteed or insured by the Australian Government or under any compensation scheme of the Australian Government, or by any other government, under any other compensation scheme or by any government agency or any other party.
3.25% per annum, payable semi-annually (in two coupons of 1.625%) in arrears on 22 January and 22 July 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 Westpac’s financial performance. The following risks may also affect an investment in the bonds:
- Liquidity Risk – An active secondary market in respect of the bonds may never be established or may be illiquid and this would adversely affect the value at which an investor could sell the bonds;
- Interest Rate Risks – bondholders may suffer unforeseen losses due to fluctuations in interest rates;
- Regulatory Risks – The banking industry in Australia is highly regulated, and regulatory changes may adversely impact affect the Westpac’s financial performance;
- Litigation Risks – Risks relating to litigation and regulatory actions;
- 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 Westpac 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:
- interest paid semi-annually in arrears;
- interest paid as 100% cash;
- interest is not deferrable nor are interest payments discretionary;
- rank equally with all other senior and unsecured creditors of Westpac.
Early Redemption by Issuer
Yes, for tax reasons.
Events of Default
Events of Default include:
- Payment Default: Applicable with a 14 day cure period for interest payments and a 7 day cure period for principal payments;
- Breach of other obligations: Applicable, with a 30 day cure period;
- Insolvency / Winding Up: Applicable;
- Enforcement against assets: Applicable, with a cure period of 30 days, and must materially prejudice the performance by the Issuer of its obligations under the bonds;
- Cessation of business: the Issuer ceases to carry on all or substantially all of its business other than under or in connection with a solvent reconstruction.
Coupon Schedule to Payment
- 22 January 2017
- 22 July 2017
- 22 January 2018
- 22 July 2018
- 22 January 2019
- 22 July 2019
- 22 January 2020
- 22 July 2020 - Maturity Date