"ricee what do you mean?"Margin is too high. I'd bet my bottom...

"ricee what do you mean?"
Margin is too high. I'd bet my bottom dollar that they could raise $1.7Bn at, say, 3.0% above and save $12m( More than the CEO gets paid in one year IIRC)! 2.8% would be reasonable.

It was pretty clear that ANZ would raise more than $750M, it's just unfortunate that they have.

THey have, by a fair margin, the largest T1 ratio out of any of the Big 4 banks... yet, they are increasing it even further.

This means that we have excess capital that is just not working particularly hard, and pays out interest, and, will one day quite possibly dilute me.

Finally, the return on these will be too low for me:) So I won't be applying for any.

"They will only be doing this if they think they can make more on the other end. Maybe a cheap aquisition in mind? They are increasing the offering maybe with this in mind."
Er, but, they have enough capital for any acquisition they would consider? They would need 3 MASSIVE acquisitions before they would be in a position to consider more capital. THis isn't happening in the short-term (AFAIK....;) )... so, we don't need capital in the short-term.

"b) There is no dilution because conversion isn't until 2016 when SP will be much higher anyway (hopefully), and if things go well they can just buy them back."
Well, sure. But, we still pay around $136M in interest payments a year, or, around $952M in interest payments. Seem expensive to you? Doesn't matter about dilution, if it turns out that we are just giving $952M away (assuming BBSW of 5%).

"c) Much better than diluting now when SP is low. The fact they are doing it this way tells you something about their opinion of the SP."
Not according to the Pecking Order THeory. Besides, in reality, per http://ozbankers.com/index.php?option=com_content&task=view&id=26&Itemid=29 , "In July, ANZ completed a $4.7Bn equity raising that involved a Share Purchase Plan (SPP) that was three times oversubscribed." That was when the shareprice was even lower! Much lower. In reality, the reason that they are doing this is because they are able to. Hybrids can amke up to 25% of T1 capital, and ANZ's was low (something like 14%? 16%?)... and, so ANZ decided to issue more, just because they can. Which, is a shame.

"d) yes it will be liquid."
I concur.