ANZ sells Australia’s first offshore CoCo under Basel III rules

Bloomberg

Australia & New Zealand Banking Group Ltd raised US$1 billion with the first offshore sale by an Aussie bank of hybrid bonds that qualify as additional tier 1 capital under the current regulatory regime.
The perpetual contingent convertible securities, which can be called by the issuer from June 2026 onward, were priced in the US currency market at a 6.75 percent yield. It’s the first such transaction of CoCo notes by an Australian bank outside the domestic market under the set of international rules known as Basel III, according to data compiled.
Additional tier 1 securities are designed to absorb losses when a bank’s equity capital falls below a level determined by prudential overseers. The US dollar issue from ANZ follows a series of local Basel III-compliant hybrid issues by Australia’s banks. National Australia Bank Ltd is currently offering Aussie dollar hybrids to investors.
ANZ’s deal was managed by the issuer itself along with Citigroup Inc, Deutsche Bank AG, Goldman Sachs Group Inc and Morgan Stanley. The notes are rated Baa1 by Moody’s Investors Service, while S&P Global Ratings has scored them as BBB-. Fitch Ratings has given them an expected ranking of BBB.
Earlier, ANZ have been progressively increasing work output from offshore offices. ANZ’s Bangalore office has been operational since 1989, making it one of the first organisations to employ IT staff based in India. ANZ employs around 4,800 staff in Bangalore, India. 1500 IT positions, 2000 positions in Payments and Institutional Operations and International and High Value Services and 1300 positions in Operations Personal Banking have been shifted from Melbourne to India. In 2006, ANZ predicted that by 2010, over 2000 jobs would have been shifted from Australia to Bangalore. In 2012 ANZ has transferred 360 permanent staffs from Melbourne and Bangalore to Capgemini.
All these staff worked in the Technology Testing and Environment Space.[citation needed] As ANZ CIO Anne announced earlier that ANZ want a Hybrid model of technology in order to achieve the 2017 Technology roadmap.