ANZ National Bank Limited Investment Statement for an offer of Perpetual callable subordinated bonds of up to $400 million

Transcription

1 ANZ National Bank Limited Investment Statement for an offer of Perpetual callable subordinated bonds of up to $400 million (with the option to accept unlimited oversubscriptions at its discretion) 27 February 2008

2 Contents Important Information Page 1 Important notice Page 2 Summary of main terms of the offer Page 2 Corporate profile Page 4 Answers to important questions Page 6 Glossary Page 14 Directory Page 15 Application Form Page 17 Investment statement This document is an investment statement for the purpose of the Securities Act 1978, relating to the issue of perpetual callable subordinated bonds by ANZ National Bank Limited (ANZ National). This Investment Statement is dated and has been prepared as at 27 February It is an important document and should be read in its entirety.

3 Important information (The information in this section is required under the Securities Act 1978) Investment decisions are very important. They often have long term consequences. Read all documents carefully. Ask questions. Seek advice before committing yourself. Choosing an investment When deciding whether to invest, consider carefully the answers to the following questions that can be found on the pages noted below: Page What sort of investment is this? 6 Who is involved in providing it for me? 6 How much do I pay? 7 What are the charges? 7 What returns will I get? 7 What are my risks? 11 Can the investment be altered? 11 How do I cash in my investment? 12 Who do I contact with enquiries about my investment? 13 Is there anyone to whom I can complain if I have problems with the investment? 13 What other information can I obtain about this investment? 13 In addition to the information in this document, important information can be found in the latest General Disclosure Statement of ANZ National. You are entitled to a copy of that General Disclosure Statement on request. A copy of the General Disclosure Statement is also available on ANZ National s website: Choosing an investment adviser You have the right to request from any investment adviser a written disclosure statement stating his or her experience and qualifications to give advice. That document will tell you: whether the adviser gives advice only about particular types of investments; and whether the advice is limited to the investments offered by one or more particular financial organisations; and whether the adviser will receive a commission or other benefit from advising you. You are strongly encouraged to request that statement. An investment adviser commits an offence if he or she does not provide you with a written disclosure statement within five working days of your request. You must make the request at the time the advice is given or within one month of receiving the advice. In addition: if an investment adviser has any conviction for dishonesty or has been adjudged bankrupt, he or she must tell you this in writing; and if an investment adviser receives any money or assets on your behalf, he or she must tell you in writing the methods employed for this purpose. Tell the adviser what the purpose of your investment is. This is important because different investments are suitable for different purposes. P A G E 0 1

4 Important notice The purpose of this Investment Statement is to provide certain key information that is likely to assist a prudent but non-expert person to decide whether or not to subscribe for the Bonds. Investors should note that other information is available in ANZ National s current General Disclosure Statement (which contains ANZ National s financial statements) and in the Deed Poll (pursuant to which the Bonds are issued). Copies of ANZ National s current General Disclosure Statement and the Deed Poll may be obtained free of charge from Computershare Investor Services Limited at Level 2, 159 Hurstmere Road, Takapuna, Auckland, or from ANZ National at Level 6, 1 Victoria Street, Wellington, or by phoning , or at ANZ National s website: This Investment Statement does not constitute an offer of Bonds in any jurisdiction other than New Zealand. No action has been or will be taken by ANZ National which would permit a public offering of the Bonds, or possession or distribution of any offering material, in any country or jurisdiction where action for that purpose is required (other than New Zealand). Bonds may only be offered for sale or sold in conformity with all applicable laws and regulations in any jurisdiction in which they are offered, sold or delivered. No information memorandum, prospectus, circular, advertisement or other offering material in respect of any Bonds may be published, delivered or distributed in or from any country or jurisdiction except under circumstances which will result in compliance with all applicable laws and regulations. Under the Deed Poll each Holder indemnifies ANZ National in respect of any loss incurred as a result of that Holder breaching the above selling restrictions. Capitalised terms used in this Investment Statement have defined meanings which appear in the Glossary. Summary of main terms of the offer This is an offer by ANZ National of perpetual callable subordinated bonds of an aggregate principal amount of $400 million with the option to accept and allot oversubscriptions, with both acceptance and allotment (including the amount of oversubscriptions) at ANZ National s discretion. The Offer is available to institutions, to certain customers of ANZ National and to other members of the public who may participate in the Offer through an NZX Firm. There is no pool of Bonds generally available to members of the public. Important Dates Opening Date: 7 March 2008 Closing Date: 16 April 2008 Rate Set Date: 17 April 2008 Issue Date: 18 April 2008 Expected date of initial quotation and trading on the NZDX: 18 April 2008 First Interest Payment Date: 18 October 2008 Subsequent Interest Payment Dates: Every 18 April and 18 October until and including the Second Call Date. The last day of each Floating Rate Interest Period from (but excluding) the Second Call Date until the Bonds are repaid in full. Rate Reset Date: 16 April 2013 First Call Date: 18 April 2013 Second Call Date: 18 April 2018 Subsequent Call Dates: Every Interest Payment Date following the Second Call Date. P A G E 0 2

5 Summary of the terms of the Bonds Deed Poll The Bonds constitute direct, unsecured, perpetual, deeply subordinated debt obligations of ANZ National. The Bonds are issued pursuant to, and subject to the terms and conditions contained in, the Deed Poll, and the other conditions specified in this Investment Statement and recorded in the Register in respect of the Bonds. Issue Price The Issue Price for each Bond is the principal amount of that Bond (being $1.00). Minimum application The minimum application amount in respect of the Bonds is $10,000 and in multiples of $1,000 thereafter. Coupon Rate The Bonds pay interest at the Coupon Rate, which will be reset on the Rate Reset Date if the Bonds are not called on the First Call Date. If the Bonds are not called on the Second Call Date, the Coupon Rate will be reset quarterly on the first day of each Floating Rate Interest Period. A description of the manner in which the Coupon Rate will be calculated is set out on page 7 under the heading What returns will I get?. The actual Coupon Rate will be advised by announcement to NZX on the Rate Set Date, the Rate Reset Date and on the first day of each Floating Rate Interest Period. Payment of interest Interest will be calculated on the principal amount of each Bond and is scheduled to be paid in arrears on each Interest Payment Date for the Bonds. However, interest may not necessarily be paid on each Interest Payment Date, as under the terms of the Bonds ANZ National has a general right and, in certain specified circumstances an obligation, to defer payments of interest on the Bonds. A description of ANZ National s rights and obligations to defer an interest payment is set out on page 7 under the heading What returns will I get?. All payments of interest are also subject to ANZ National and the ANZ National Bank Group being solvent immediately following the payment. Until the Second Call Date interest will be payable in equal instalments on each Interest Payment Date. After the Second Call Date, if the Bonds are not called, the amount of interest payable on each Interest Payment Date will be determined by reference to the number of days in the Floating Rate Interest Period ending on that date. No maturity date The Bonds are undated, perpetual obligations of ANZ National which have no maturity date. This means that the only circumstances in which a Holder can cash in his or her investment is if: ANZ National exercises its right to redeem the Bonds; ANZ National is put into Liquidation; or the Holder sells their Bonds on the secondary market. Redemption ANZ National may, at its discretion, elect to redeem the Bonds on the First Call Date (18 April 2013), the Second Call Date (18 April 2018) or on any Interest Payment Date following the Second Call Date, subject to certain conditions being satisfied. ANZ National may also elect to redeem the Bonds on any date during the term of the Bonds following the occurrence of a Tax Event or a Regulatory Event. A description of what constitutes a Tax Event and a Regulatory Event is set out on page 9. Conditions to exercise of redemption option ANZ National s ability to redeem the Bonds on any Call Date or on any other date following the occurrence of a Tax Event or a Regulatory Event, is subject to: ANZ National and the ANZ National Bank Group satisfying the Solvency Test; the directors of ANZ National having resolved that redemption of the Bonds is in the best interests of ANZ National; and obtaining the prior written consent of the RBNZ, APRA (if APRA s consent is required) and any other required regulatory consent. Status and subordination The Bonds are unsecured, deeply subordinated obligations of ANZ National as described on page 6 under the heading What sort of investment is this?. The Bonds do not constitute deposit liabilities of ANZ National. Further issues of Bonds ANZ National may create and issue additional debt or equity obligations (whether under the Deed Poll or otherwise) ranking equally with, ahead of, or after, the Bonds without the consent of the Holders. Additional debt or equity obligations may be issued on the terms specified by ANZ National at the time of issue. NZDX Quotation Application has been made to NZX for permission to list the Bonds on the NZDX and all the requirements of NZX relating thereto that can be complied with on or before the date of this Investment Statement have been duly complied with. However, NZX accepts no responsibility for any statement in this Investment Statement. Maximum amount The aggregate principal amount of Bonds offered is $400 million (with the option to accept oversubscriptions at ANZ National s discretion). The maximum amount of oversubscriptions which may be accepted by ANZ National is unlimited and will be determined at ANZ National s discretion. ANZ National may however decide to close the offer before it is fully subscribed. Who may apply Bonds are offered to New Zealand resident investors only. To make an investment you must complete the Application Form and pay the Issue Price of the Bonds. No Guarantee The Bonds do not represent deposits, securities or other liabilities of Australia and New Zealand Banking Group Limited (ANZBGL) or any other member of the ANZBGL Group (other than ANZ National). None of ANZBGL or any other member of the ANZBGL Group (other than ANZ National) guarantees, supports or otherwise stands behind the Bonds and a Holder has no claim whatsoever on ANZBGL or any other member of the ANZBGL Group (other than ANZ National) for payment of any amount in respect of the Bonds. However, because the Bonds will count as upper tier 2 capital for ANZBGL on a consolidated basis, certain terms of the Bonds (for example the interest deferral obligations) refer to ANZBGL and the ANZBGL Group and to APRA which is the banking supervisory authority in Australia responsible for supervising ANZBGL and the ANZBGL Group. P A G E 0 3

6 Corporate profile Background ANZ National (the amalgamated entity comprising the businesses formerly carried on by ANZ Banking Group (New Zealand) Limited and The National Bank of New Zealand Limited) is a registered bank under the Reserve Bank of New Zealand Act ANZ National is wholly owned by ANZBGL. ANZBGL does not guarantee the obligations of ANZ National under the Bonds. ANZ National Bank Group is the largest full-service banking group in New Zealand with total assets of $107,787 million and total liabilities of $99,084 million as at 30 September 2007, and its two main brands, ANZ and The National Bank of New Zealand, have significant market share in most banking markets in New Zealand. ANZ National holds approximately 33.6% of the total assets held by registered banks in New Zealand 1 and is supported by over 300 branches across its two brands. Business lines The business of ANZ National is currently organised into the following six customer-focused business units: ANZ Retail Banking; National Bank Retail Banking; Rural Banking; Institutional, Corporate & Commercial; Private Banking; and UDC (asset finance). Centralised back office and corporate functions support these business units. Life insurance and funds management activities are carried out through a joint venture with the ING Group. ANZ National has made a strategic decision to retain both the ANZ and The National Bank of New Zealand brands in the New Zealand market. ANZ National s dual brand strategy operates differently for each business unit to suit the needs of customers in those businesses. The brands are separate and competing, but are complementary in that the overall brand positions are designed in a way to increase the reach of ANZ National. ANZ Retail Banking and National Bank Retail Banking These business units provide banking products and services to the personal banking segment and the small business segment through separate ANZ and The National Bank of New Zealand branded distribution channels. Personal banking customers have access to a wide range of financial services and products including core banking products such as deposit and cheque accounts, various lending products and insurance products. Small business banking services cover owner-managed and small-sized enterprises with annual revenues of less than $5 million and with relatively simple banking requirements. Lending in this market is typically secured by mortgages over property. National Bank Retail Banking consistently receives one of the highest ratings of all the major banks in New Zealand for overall customer service. 2 Rural Banking The Rural Banking business unit provides a broad suite of banking products and services to farmers through both the ANZ and The National Bank of New Zealand brands. ANZ National has the largest share of the New Zealand rural sector, which is primarily driven by the success of The National Bank of New Zealand branded business. The National Bank of New Zealand brand has a relationship management approach and has held its market-leading position for well over a decade. As at 30 September 2007, ANZ National had approximately 42.1% of total rural lending by registered banks in New Zealand. 3 Institutional, Corporate & Commercial Institutional, Corporate & Commercial manages the banking arrangements of New Zealand businesses with annual turnovers of $2 million and greater. The business unit works with a range of companies from familyowned businesses to large corporate organisations and government clients. Customers are managed in three relationship businesses, segmented based on complexity and customer requirements: Institutional Large multi-banked corporates, often global, who require sophisticated product and structuring solutions. Corporate Primarily privately owned businesses, with a formal management and governance structure ship, with complex funding requirements. Commercial - Privately owned businesses, typically with one or two shareholders, requiring cashflow lending, deposit and transactional facilities. In addition three specialised product businesses provide solutions across the wider ANZ National customer franchise: Corporate Finance provides complex financing and advisory services, structured financial products, leasing, private equity, project, export and leveraged finance and infrastructure. Markets provides foreign exchange and commodity trading and sales-related services, origination, underwriting, structuring, risk management and sale of credit and derivative products globally. Working Capital provide cash management, trade finance, international payments, clearing and custodian services. Institutional, Corporate & Commercial businesses are supported by a range of infrastructural and operational units. P A G E 0 4

7 Private Banking Private Banking services the particular banking needs of high income and high net worth individuals and families. Private Banking has been established as a stand-alone business unit, bringing together the previously distinct Private Bank businesses which operated separately out of the ANZ Retail Banking and The National Bank Retail Banking business units. UDC UDC Finance Limited ( UDC ) is currently New Zealand s only bank owned finance company. UDC is principally involved in financing business equipment, plant and machinery for New Zealand based small and medium sized businesses. The five distinct business lines of UDC are business lending, auto lending, agriculture lending, vendor leasing and investments. The business is funded predominantly through the retail debenture market. According to Part 1 of the 2006 KPMG Financial Institutions Performance Survey, released by KPMG New Zealand in December 2006, UDC occupied a marketleading position in diversified finance in New Zealand in terms of its total assets. 1 Based on data on total assets in the RBNZ Aggregate Standard Statistical Return for registered banks. 2 Source: ACNielsen Consumer Finance Monitor, ACNielsen is an independent research agency that conducts the Consumer Finance Monitor, continuously surveying New Zealanders impressions and experiences of retail banking. 3 This is based on data sourced from the RBNZ s Aggregate Standard Statistical Return for registered banks in New Zealand based on claims classified as agriculture. UDC represents one of the non-bank brands of the ANZ National Group in New Zealand. UDC products are sold through UDC proprietary sales channels, intermediary channels and the ANZ Retail Banking and The National Bank Retail Banking networks. ING Joint Venture Through ANZ National s customer-facing business units, it distributes wealth management and insurance products and services that have been manufactured or procured through ING (NZ) Holdings Limited, a joint venture company owned 49% by ANZ National and 51% by the ING Group. Credit rating At the date of this Investment Statement ANZ National has the following debt ratings for long-term unsubordinated unsecured obligations payable in New Zealand in New Zealand dollars: Standard and Poor s Rating Services: AA Moody s Investor Services: Aa2 The following debt ratings have been assigned to the Bonds: Standard and Poor s Rating Services: A+ Moody s Investor Services: Aa3 P A G E 0 5

8 Answers to important questions 1. What sort of investment is this? The Bonds are unsecured, deeply subordinated, interest bearing debt securities issued by ANZ National. The Bonds are perpetual and have no maturity date but, subject to certain conditions, are callable by ANZ National on 18 April 2013, 18 April 2018, on any Interest Payment Date after 18 April 2018 or on any date if a Tax Event or a Regulatory Event occurs. The Bonds will be issued pursuant to, and subject to the terms and conditions contained in, the Deed Poll. No maturity date As the Bonds are perpetual and have no maturity date, Holders have no ability to cash in their investment, except: (a) if ANZ National exercises its right to redeem the Bonds; (b) if ANZ National is put into Liquidation, in which case Holders may declare their Bonds to have become due and payable; or (c) by selling their Bonds on the secondary market. Status and subordination The principal amount of, and interest on, the Bonds are direct, unsecured, deeply subordinated obligations of ANZ National. The Bonds will rank equally with each other and behind all other creditors of ANZ National except the holders of any other Perpetual Subordinated Debt and the holders of obligations expressed to rank equally with or after Perpetual Subordinated Debt. This means that if ANZ National goes into Liquidation the holders of the Bonds will not be entitled to any payment of principal or interest until all Prior Ranking Creditors of ANZ National, including deposit holders, have been paid in full. ANZ National is only entitled to make interest payments on the Bonds, and to call the Bonds and repay the principal amount, if it and the ANZ National Bank Group is and will remain solvent immediately after the payment is made. In addition ANZ National must not exercise its option to redeem the Bonds, whether on a Call Date or on any other date following the occurrence of a Tax Event or a Regulatory Event, unless: the directors of ANZ National have resolved that redemption of the Bonds is in the best interests of ANZ National; and all required regulatory consents (including the consent of APRA if required) have been obtained. No right of set-off Holders of Bonds are not entitled to exercise any rights of set-off which they may otherwise have against ANZ National against any amounts due to them in respect of the Bonds. In addition, Holders have no offsetting rights or claims on ANZ National if ANZ National does not make any payment of interest (including Deferred Interest) on the Bonds. Registered Bonds The Bonds will be issued in registered form. This means that title to a Bond will be determined solely by who is entered on the Register in relation to that Bond. ANZ National will rely on the Register for the purpose of determining entitlements to interest payments on each Interest Payment Date, and for repayment of the principal amount of the Bonds if they are called by ANZ National or otherwise become payable. Both ANZ National and the Registrar are entitled to rely on the Register as constituting the sole and conclusive record of all Bonds and as to the holders of those Bonds. Neither ANZ National nor the Registrar shall be liable to any holder of Bonds for relying on the Register or for accepting in good faith as valid any detail recorded in the Register subsequently found to be forged, irregular or not authentic. 2. Who is involved in providing it for me? Issuer ANZ National is the issuer of the Bonds. ANZ National s registered office is: Level 14, ANZ Tower Lambton Quay Wellington Activities of ANZ National ANZ National has, through its predecessors, carried on the business of banking in New Zealand since A more detailed description of the principal business activities carried on by ANZ National is set out on page 4 under the heading Corporate Profile. ANZ National is exempt under the Securities Act 1978 from the obligation to appoint a trustee in respect of the Bonds. Accordingly, no trustee is appointed to represent Holders in respect of the Bonds. Registrar and Paying Agent The Registrar and Paying Agent of the Bonds is Computershare Investor Services Limited. Computershare Investor Services Limited s address is: Level 2, 159 Hurstmere Road Private Bag 92119, Takapuna Auckland No Guarantee The Bonds do not represent deposits, securities or other liabilities of ANZBGL or any other member of the ANZBGL Group (other than ANZ National). None of ANZBGL or any other member of the ANZBGL Group (other than ANZ National) guarantees, supports or otherwise stands behind the Bonds and a Holder has no claim whatsoever on ANZBGL or any other member of the ANZBGL Group (other than ANZ National) for payment of any amount in respect of the Bonds. P A G E 0 6

9 However, because the Bonds will count as upper tier 2 capital for ANZBGL on a consolidated basis, certain terms of the Bonds (for example the interest deferral obligations) refer to ANZBGL and the ANZBGL Group and to APRA which is the banking supervisory authority in Australia responsible for supervising ANZBGL and the ANZBGL Group. 3. How much do I pay? Minimum Investment The Issue Price of each Bond is the principal amount of that Bond (being $1.00) and is payable on or before the Issue Date. You may apply for as many Bonds as you wish provided you meet the minimum application amount of $10,000 (and multiples of $1,000 thereafter). There is no maximum limit on the principal amount of Bonds you may apply for. Payments Applicants who are members of Austraclear New Zealand, or who are able to have payments made on their behalf through Austraclear New Zealand, may settle their applications for the Bonds on the Issue Date through the Austraclear New Zealand System. Applicants who are not members of Austraclear New Zealand must pay for the Bonds applied for by a personal cheque or, if the application is for Bonds of an aggregate principal amount of $500,000 or more, by bank cheque or other method acceptable to the Lead Manager. Cheques should be in New Zealand dollars drawn on a New Zealand branch of a financial institution and submitted with the completed Application Form. Cheques should be made payable to ANZ National Subordinated Bond Offer and crossed Not Transferable and must not be post dated. Where to send your Application Form and payment All completed Application Forms plus payment should be sent to the address of the Registrar set out in the Application Form or lodged with any NZX Firm, the Lead Manager or the Organising Participant or to any other channel approved by NZX. Applicants who wish to apply for Bonds must ensure that completed Application Forms are lodged in time to be received by the Registrar before 3pm on the Closing Date. Applications ANZ National reserves the right to refuse any application or accept any application in part only without assigning a reason. ANZ National may change the Opening Date, the Closing Date or the Rate Set Date in respect of the Bonds. ANZ National will pay interest at the Official Cash Rate on application money received in respect of accepted applications for Bonds from (and including) the date the cheque is banked or the application is settled through the Austraclear New Zealand system until (but excluding) the Issue Date. Such interest will be paid to the applicant within five Business Days after the Issue Date and will be paid into the bank account nominated by the applicant on the Application Form, or if no account is nominated by cheque to the address of the applicant. Any application money received in respect of an application which is not accepted by ANZ National, whether because of late receipt or otherwise, will be returned (without interest) to the applicant as soon as reasonably practicable after ANZ National decides not to accept the application and, in any event, within 14 days of the Issue Date. If ANZ National accepts an application in part, the balance of the application money (without interest) will be refunded as soon as reasonably practicable and, in any event, within 14 days of the Issue Date. Where an applicant s payment for Bonds is dishonoured, ANZ National may forfeit any Bonds issued to that applicant, and may pursue the defaulting applicant for damages suffered by ANZ National. ANZ National intends to pay brokerage to NZX Firms in respect of applications for Bonds. This will not affect your return on the Bonds. No cooling off There is no cooling off period in relation to the Bonds. Consequently, once an application has been lodged, it cannot be withdrawn, unless ANZ National determines otherwise in its sole discretion. 4. What are the charges? Applicants pay no fees or charges to invest in the Bonds (other than the Issue Price of the Bonds). However, applicants may have to pay a brokerage fee or commission to the person who recommends the investment to you or who arranges the application for you. 5. What returns will I get? Overview The information set out in this section should be read in conjunction with the information set out in the section What are my risks? on page 11. Certain events could reduce or eliminate the returns intended to be derived from holding the Bonds. Nature of the returns The returns you receive will depend on the Coupon Rate applicable to the Bonds, the term of your investment, any taxes applicable to your investment and whether any interest payments are deferred. It is not possible to quantify as at the date of this Investment Statement the exact amount of returns Holders will receive, and therefore no such amount can be promised by ANZ National. P A G E 0 7

10 Coupon Rate Subject to the subordination provisions (described on page 6 under the heading Status and subordination ), and the Deferred Interest provisions (described on page 9 under the heading Interest payments ) interest is payable on the Bonds at the Coupon Rate. Coupon Rate until the Second Call Date The Coupon Rate for the first five year period from (and including) the Issue Date until (but excluding) 18 April 2013 will equal the Five Year Swap Rate on the Rate Set Date plus the Margin. If the Bonds are not called, the Coupon Rate for the second five year period from (and including) 18 April 2013 until (but excluding) the Second Call Date (18 April 2018) will equal the Five Year Swap Rate on the Rate Reset Date plus the Margin. During the period from (but excluding) the Issue Date until (and including) the Second Call Date interest will be payable in equal instalments on each Interest Payment Date. The Five Year Swap Rate on any date is the average of the bid and offered swap rates (rounded if necessary to the nearest two decimal places with five being rounded up) displayed on Reuters Page FISSWAP or its successor page at or about 11am on that date for a five year interest rate swap or, if that rate is not available, the average (rounded if necessary to the nearest two decimal places with five being rounded up) of the mean bid and offered five-year swap rates quoted by four Reference Banks on that date. Coupon Rate after the Second Call Date If the Bonds are not called, the Coupon Rate for the period from (and including) the Second Call Date until (but excluding) the date the Bonds are redeemed will equal the Three Month FRA Rate, which is reset quarterly, plus the Adjusted Margin. The Three Month FRA Rate will be determined by ANZ National on the Second Call Date (being the first day of the first Floating Rate Interest Period) and on the first day of each subsequent Floating Rate Interest Period. Each Floating Rate Interest Period shall be a period of three months duration and: (a) the first Floating Rate Interest Period will commence on the Second Call Date and each subsequent Floating Rate Interest Period will commence on the expiry of the previous one; (b) if a Floating Rate Interest Period would otherwise end on a day which is not a Business Day it will be extended to the next Business Day unless that Business Day would fall in the next succeeding calendar month in which case it shall be brought forward to the immediately preceding Business Day; and (c) if the final Floating Rate Interest Period would otherwise extend beyond the date on which the Bonds are repaid in full, it will end on that date. The Three Month FRA Rate in respect of any Floating Rate Interest Period is the three month FRA settlement rate (rounded, if necessary, to the nearest four decimal places, with five being rounded up, as displayed at or about 10.45am on the first day of the Floating Rate Interest Period on the Reuters page BKBM (or its successor page)) or, if that rate is not available, then the average (rounded upwards if necessary to the nearest four decimal places) of the mean bid and offered three month FRA settlement rates quoted by four Reference Banks on that date. The amount of interest payable on each Interest Payment Date after the Second Call Date will be determined by reference to the number of days in the Floating Rate Interest Period ending on that date. The actual Coupon Rate will be advised by announcement to NZX on the Rate Set Date, the Rate Reset Date and the first day of each Floating Interest Rate Period. The Margin will be determined by ANZ National in consultation with the Lead Manager and advised by announcement to NZX prior to the Rate Set Date. The Adjusted Margin will equal the Margin plus 1.00% per annum. Interest payments Interest is scheduled to be paid in arrears on each Interest Payment Date, subject to ANZ National and the ANZ National Bank Group being solvent immediately following the payment. However, ANZ National has no obligation to pay interest on an Interest Payment Date. Without limiting this general right to defer interest payments, ANZ National will not pay interest on any payment date if: (a) the payment would exceed APRA Distributable Profits as at the Record Date for the relevant payment date unless otherwise approved by APRA; or (b) the ANZBGL Level 2 Group has insufficient APRA Retained Profits to make the interest payment (or the payment of Deferred Interest as defined below) as at the relevant payment date; or ((a) and (b) together, the APRA Tests); or the directors of ANZ National resolve, after due enquiry, that the financial condition of ANZ National does not support the payment. APRA Distributable Profits is, in summary, the amount of profit of the ANZBGL Group (on a consolidated basis) available for distribution after providing for interest or dividends payable on tier 1 and upper tier 2 securities of the ANZBGL Group in the 12 months prior to the payment date. For a full definition of APRA Distributable Profits, please refer to the Deed Poll. P A G E 0 8

11 Any failure to pay, or election not to pay, interest will not constitute a default by ANZ National nor shall it give a Holder any right to apply for ANZ National to be placed in Liquidation, or voluntary administration, or to cause a receiver, or a receiver and manager, to be appointed in respect of the ANZ National. Any interest not paid on an Interest Payment Date, together with any other interest not paid on any other Interest Payment Date will, so long as it remains unpaid, constitute Deferred Interest. Deferred Interest may, at ANZ National s discretion, be paid in whole or in part (any interest payment made in part will be made on a pro rata basis among Holders) at any time by giving not less than seven days notice to the Holders, unless an APRA Test would apply if that payment were made. Subject to the subordination provisions (described on page 6 under the heading Status and subordination ), all Deferred Interest will become due and payable in full on the earliest of: (a) the date on which the Bonds are to be redeemed following an election to redeem by ANZ National; or (b) ANZ National being put into Liquidation. Under the Deed Poll, ANZ National has undertaken that for so long as any Deferred Interest remains unpaid, it will not declare or pay any dividend on, or make any other distribution in respect of, any class of its share capital or undertake any buy-back, redemption, repurchase or other acquisition of any other securities or instruments of ANZ National that rank equally with or behind the Bonds or pay any interest in respect of any liability of it which is expressed to rank equally with or behind the Bonds. This undertaking is subject to various exceptions, including (without limitation) for proportionate payments on the Bonds and other equally ranking securities of ANZ National, and repurchases (including buy-backs), redemptions or other acquisitions of ANZ National s shares in certain circumstances. The preceding sentence is not an exhaustive list of the exceptions and for more information you should refer to clause 10.2 of the Deed Poll. Deferred Interest does not itself bear interest. No maturity date The Bonds are perpetual obligations of ANZ National which have no maturity date. This means that the only circumstances in which a Holder can cash in his or her investment is if: ANZ National exercises its right to redeem the Bonds; ANZ National is put into Liquidation; or the Holder sells his or her Bonds on the secondary market. Redemption ANZ National may, in its discretion, elect to redeem the Bonds on the First Call Date (18 April 2013), the Second Call Date (18 April 2018) and on any Interest Payment Date following the Second Call Date, subject to certain conditions being satisfied. ANZ National may also elect to redeem the Bonds on any date during the term of the Bonds following the occurrence of a Tax Event or a Regulatory Event. Tax Event means any change in or amendment to the laws or regulations of New Zealand or any political subdivision or any authority thereof or therein having power to tax, any change in the application or official interpretation of such laws or regulations, or any ruling, confirmation or advice from a taxing authority (including a failure or refusal to provide a ruling) which change, amendment or ruling becomes effective on or after the Issue Date and which has the effect that interest payable in respect of the Bonds is not or may not be allowed as a deduction to ANZ National for New Zealand income tax purposes. Regulatory Event means that the Bonds cease to qualify as upper tier 2 capital for: (a) ANZ National; or (b) ANZBGL on a Level 2 (consolidated) basis. Conditions to exercise of redemption option ANZ National s ability to redeem the Bonds on any Call Date or on any other date following the occurrence of a Tax Event or a Regulatory Event, is subject to: ANZ National and the ANZ National Bank Group satisfying the Solvency Test; the directors of ANZ National having resolved that redemption of the Bonds is in the best interests of ANZ National; and obtaining the prior written consent of the RBNZ, APRA (if APRA s consent is required) and any other required regulatory consent. If ANZ National decides to call the Bonds, it will provide Holders with at least 10 Business Days irrevocable written notice and, subject always to the subordination provisions (as described on page 6 under the heading Status and subordination ), Holders are entitled to repayment of the principal amount of the Bonds and accrued interest to the date of repayment and Deferred Interest (if any) on the relevant Call Date or, in the case of a call following the occurrence of a Tax Event or a Regulatory Event, on the date specified in the notice. Holders are not entitled to take any action to recover amounts payable in respect of the Bonds including if ANZ National fails to pay interest or to comply with any other terms and conditions of the Bonds. However, if Liquidation proceedings are commenced by another creditor of ANZ National, Holders are entitled to prove in that liquidation for the principal amount and interest (including Deferred Interest) owed to them. Payments Payments in respect of a Bond will be made to the person registered as the Holder of the Bond as at the Record Date for the payment. Payments will be made to the bank P A G E 0 9

12 account nominated by the Holder on the Application Form or such other bank account as the Holder may advise the Registrar in writing from time to time, provided such notice is given prior to the Record Date for the payment. If no bank account is so nominated or advised payments will be made by cheque to the address of the Holder recorded in the Register. If a payment date is not a Business Day, payment will be made on the next day which is a Business Day, but the amount paid will not be adjusted. Key factors that determine returns The key factors that determine the returns on a Holder s investment are: The Coupon Rate applicable to the Bonds and the term of the investment; Whether the Bonds are redeemed by ANZ National; Whether payments of interest are made on schedule or deferred; Any applicable taxes; Fluctuations in the price of Bonds if sold on a secondary market, as described on page 11 under the heading What are my risks? ; and The other risk factors described on page 11 under the heading What are my risks?. There are no reserves or retentions that will impact on returns to investors, other than the discretion given to ANZ National to defer interest payments (described on page 8 under the heading Interest payments ). However ANZ National may make certain payments to certain other creditors of ANZ National in priority to payments to the Holders (as described on page 6 under Status and subordination ). If ANZ National does not have sufficient funds at any time to make all payments due, payments to these prior ranking creditors will reduce the amount available to Holders. In the event that ANZ National does not have sufficient funds to pay Holders, Holders have no right of recourse to any assets of ANZ National for payment. Taxation The return on the Bonds will be affected by taxes. If a law requires ANZ National to deduct an amount in respect of taxes from a payment under a Bond, such that the Holder would not actually receive on the due date the full amount provided for under the Bond, then ANZ National will deduct the amount and pay it to the relevant authority. ANZ National is not obliged to pay any additional amounts to the Holder in relation to any such deduction. Under the Deed Poll, each Holder indemnifies ANZ National in respect of any tax which ANZ National or the Registrar becomes liable to pay on behalf of that Holder. ANZ National may deduct any indemnity payment from future amounts payable. The information set out below does not constitute taxation advice to any Holder. The information set out below is believed by ANZ National to be correct as at the date of this Investment Statement. Taxation laws are subject to change, and such changes may materially affect your tax position with respect to an investment in the Bonds. You should seek qualified, independent financial and taxation advice before deciding to invest. In particular, you should consult your tax advisor in relation to your specific circumstances. New Zealand taxation implications for New Zealand resident Holders Resident withholding tax If you are either a New Zealand resident for tax purposes or you are engaged in business through a fixed establishment (as defined in the Tax Act) in New Zealand ( Resident Holder ), resident withholding tax ( RWT ) will be deducted from the gross amount of interest and other payments deemed to be interest paid to you in accordance with the provisions of the Tax Act. As at the date of this Investment Statement, RWT of 19.5% will be deducted if you supply your IRD number to the Registrar unless you elect for RWT to be deducted at a rate of 33% or 39% (although it should be noted that the 19.5% rate is only available to corporate Holders in certain specific circumstances). Where you do not supply your IRD number to the Registrar, RWT will be deducted at a rate of 39% (or such higher or maximum rate) as specified in the Tax Act from all interest payments. RWT will not be deducted by ANZ National where you provide a copy of an appropriate certificate of exemption from RWT to the Registrar at least five Business Days prior to the Record Date for the relevant payment. Non-resident withholding tax Notwithstanding that the Bonds are offered to New Zealand resident investors only, if at any time a Bond is held by a Holder who is not New Zealand tax resident and who is not engaged in business through a fixed establishment (as defined in the Tax Act) in New Zealand ( Non-resident Holder ) non-resident withholding tax ( NRWT ) will be deducted, where appropriate, at the rate required by law from payments made to such Holder. If ANZ National is lawfully able to pay the approved issuer levy (as defined in section 86F of the Stamp and Cheque Duties Act 1971) in respect of any payment of interest (or deemed interest) to a Non-resident Holder, ANZ National will pay the approved issuer levy to the appropriate authority and will deduct the amount paid from the interest (or deemed interest) payable to that Non-resident Holder in lieu of deducting New Zealand non-resident withholding tax at the rate otherwise applicable from that payment. Under the financial arrangements rules, gains on the sale of Bonds will be taxable to Resident Holders. Nonresident Holders may also be subject to tax on such gains. Holders should consult their own taxation advisers about the effect of taxes on their investment in any Bonds. P A G E 1 0

13 Person legally liable to pay returns The person legally liable to pay principal and interest on the Bonds is ANZ National. The Bonds are not guaranteed by any member of the ANZ National Bank Group, ANZBGL or any member of the ANZBGL Group, or any other person. 6. What are my risks? The principal risks for Holders are that: they may be unable to recover from ANZ National all or any of the principal amount of the Bonds or that they may not receive timely, or any, interest payments on the Bonds, and therefore may not receive the returns described on page 7 in What returns will I get?. These circumstances could arise if ANZ National elects or is obliged to defer interest payments (the circumstances in which ANZ National may elect, or is obliged, to defer interest payments are described on page 8 under the heading Interest payments ), becomes insolvent for any reason, or is placed in receivership, Liquidation or statutory management or is otherwise not able to meet its debts as they fall due. ANZ National s obligation to defer interest payments may arise due to the financial condition of ANZ National, the ANZ National Bank Group, ANZBGL or the ANZBGL Group. the Bonds are deeply subordinated obligations of ANZ National and do not constitute deposits. This means that if ANZ National goes into Liquidation (other than for the purposes of a solvent reconstruction or amalgamation), Holders of the Bonds will not be entitled to any payment of the principal amount of, or accrued interest or Deferred Interest on, their Bonds until all Prior Ranking Creditors of ANZ National, including deposit holders, have been paid in full. ANZ National may only make interest payments on the Bonds if it and the ANZ National Group is solvent immediately following the payment. as the Bonds have no maturity date, ANZ National is not obliged to repay the principal amount of the Bonds unless it elects to redeem them or is placed in Liquidation. This means that the only way that a Holder of Bonds is able to cash in his or her investment, other than in the limited circumstances described in the preceding sentence, is to sell them. if you sell or transfer your Bonds (as described on page 12 in How do I cash in my investment? ), the price that you obtain for those Bonds may be less than the amount you paid to purchase them. This is because changes in market interest rates or other market factors can affect the market value of your Bonds. For instance, if market interest rates go up, the market value of your Bonds may go down, and vice versa. This loss or gain of capital is a function of the effect of a change in underlying market interest rates on the value of your investment over which ANZ National has no control. the price at which Holders are able to sell their Bonds may also be affected by a deterioration, whether real or perceived, in the creditworthiness of ANZ National or the ANZBGL Group (including a downgrade of the credit rating of ANZ National or ANZBGL), or the lack of an established market or demand for the Bonds. Consequences of insolvency The Bonds are direct, unsecured, deeply subordinated debt obligations. This means that in a Liquidation of ANZ National the Holders rights to repayment of principal and interest (including Deferred Interest) in respect of the Bonds will rank after the claims of: persons to whom preferential payments must be made (including creditors of ANZ National preferred by law); and Prior Ranking Creditors. Claims of the Holders will thereafter rank equally with the claims of all other creditors of ANZ National in respect of Perpetual Subordinated Debt and obligations expressed to rank equally with Perpetual Subordinated Debt and ahead of ANZ National s shareholders and other creditors in respect of obligations expressed to rank after Perpetual Subordinated Debt. Holders will not, in any circumstances, be liable to pay money to any person as a result of the insolvency of ANZ National. 7. Can the investment be altered? Once ANZ National has accepted your application, the amount that you must pay for the Bonds or the returns which you are entitled to receive can only be altered by means of an alteration to the Deed Poll. The Deed Poll may be altered: (a) without the consent of any Holder where such amendment is of a minor or technical nature or will not be of any prejudice to the Holders or is expressed to be inapplicable to any Bonds then outstanding or is made to comply with applicable law including the Listing Rules; or (b) if the amendment is approved by Holders of all instruments issued under the Deed Poll (or a class of Holders, if applicable) by an Extraordinary Resolution at a meeting of Holders (whether convened by ANZ National or Holders), and provided any necessary regulatory consents (including the prior written consent of APRA if required) to the amendment are obtained. An Extraordinary Resolution is a resolution passed at a meeting of Holders of all instruments issued under the Deed Poll (or a relevant class of Holders) duly convened and held in accordance with the rules and procedures for meetings of Holders set out in schedule 2 to the Deed Poll at which not less than 75% of the persons P A G E 1 1