- Release Date: 11/11/15 10:10
- Summary: WAV/RULE: BNZ: BNZ - Waivers from NZDX Listing Rules
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BNZ 11/11/2015 10:10 WAV/RULE NOT PRICE SENSITIVE REL: 1010 HRS Bank of New Zealand WAV/RULE: BNZ: BNZ - Waivers from NZDX Listing Rules NZX Regulation Decision Bank of New Zealand (BNZ) Application for waivers from - NZX Debt Market Listing Rules 3.2.1(a), 7.12.2, 10.3 and 10.4 6 November 2015 Waiver from Rule 3.2.1(a) Decision 1. On the basis that the information provided by Bank of New Zealand ("BNZ") is complete and accurate in all material respects, NZX Regulation ("NZXR") grants BNZ a waiver from NZX Debt Market Listing Rule ("Rule") 3.2.1(a) so that the Deed Poll is not required to provide that the appointment of a new trustee is to be approved by an extraordinary resolution of holders of BNZ Notes ("Noteholders"). 2. The information on which this decision is based is set out in Appendix One to this decision. This waiver will not apply if that information is not or ceases to be full and accurate in all material respects. 3. The Rule to which this decision relates is set out in Appendix Two to this decision. 4. Capitalised terms that are not defined in this decision have the meanings given to them in the Rules. Reasons 5. In coming to the decision to provide the waiver set out in paragraph 1 above, NZXR has considered that: a. registered banks are exempt from the requirement to have a trustee under the Financial Markets Conduct Act 2013 in recognition of their alternative regulatory supervision structure; b. given that the general law recognises alternative regulatory structures for registered banks (including prudential supervision by the RBNZ) NZXR accepts that it is appropriate to grant a waiver from the requirements in Rule 3.2.1(a), which would otherwise add an extra layer of supervision not envisioned by the general law; and c. NZXR has granted similar waivers in respect of debt issues by other registered banks. Waiver from Rule 7.12.2 in respect of Routine Payments of Interest Decision 6. Subject to the conditions in paragraph 7 below, and on the basis that the information provided by BNZ is complete and accurate in all material respects, NZXR grants BNZ a waiver from Rule 7.12.2 in respect of routine payments of interest on the BNZ Notes. 7. The waiver contained in paragraph 6 is granted on the following conditions: a. the timing of, and record date for, the routine payments of interest are disclosed in the investment statement for the offer of the BNZ Notes (the "Investment Statement"); b. the process for determining the interest rate and the date on which the interest rate will be announced via NZX, are disclosed in the Investment Statement; c. the interest rate that will apply until the Optional Redemption Date will be announced via NZX on or before the date the BNZ Notes are issued; and d. the waiver, its conditions and its implications are disclosed in the Investment Statement. 8. The information on which this decision is based is set out in Appendix One to this decision. This waiver will not apply if that information is not or ceases to be full and accurate in all material respects. 9. The Rule to which this decision relates is set out in Appendix Two to this decision. 10. Capitalised terms that are not defined in this decision have the meanings given to them in the Rules. Reasons 11. In coming to the decision to provide the waiver set out in paragraph 6 above, NZXR has considered that: a. due to the possibility that the BNZ Notes may be Converted into ordinary shares in NAB in certain situations, the BNZ Notes constitute Convertible Debt Securities and the exception in Rule 7.12.4 does not apply; b. although the BNZ Notes are technically Convertible Debt Securities, they will have features typical of subordinated debt securities while they are Quoted on the NZDX; c. the interest payments to be made on the BNZ Notes are routine payments (subject to BNZ's satisfaction of a solvency condition). The conditions set out in paragraph 7 will ensure that Noteholders have certainty as to the amounts (until the Optional Redemption Date) and timing of interest payments; and d. BNZ will be subject to Rule 7.12.6 and will be required to notify NZX immediately, in the event that interest is not paid on the due date. Waiver from Rule 7.12.2 in the Event of Conversion due to Non-Viability Trigger Event Decision 12. Subject to the conditions in paragraph 13 below, and on the basis that the information provided by BNZ is complete and accurate in all material respects, NZXR grants BNZ a waiver from Rule 7.12.2 so that, if Conversion of the BNZ Notes occurs on account of a non-viability trigger event, BNZ is not required to give notice for the purposes of Rule 7.12.2 in relation to the Conversion, at least ten Business Days before the Conversion occurs. 13. The waiver contained in paragraph 12 is granted on the following conditions: a. the notice required by Rule 7.12.2 must be given as soon as practicable and in any event before the NZDX opens for trading on the Business Day after Conversion occurs; b. the information required by Rule 7.12.2 which is known at the date of the Investment Statement, is disclosed in the Investment Statement; c. the waiver, its conditions and its implications are disclosed in the Investment Statement. 14. The information on which this decision is based is set out in Appendix One to this decision. This waiver will not apply if that information is not or ceases to be full and accurate in all material respects. 15. The Rule to which this decision relates is set out in Appendix Two to this decision. 16. Capitalised terms that are not defined in this decision have the meanings given to them in the Rules. Reasons 17. In coming to the decision to provide the waiver set out in paragraph 12 above, NZXR has considered that: a. BNZ has submitted, and NZXR has no reason not to accept, that if Conversion is required on account of a non-viability trigger event, it will be unable to provide 10 Business Days' notice as required by Rule 7.12.2 as the RBNZ and APRA standards require Conversion to occur immediately; b. BNZ will be required, as a condition of this waiver, to disclose the implications of this waiver in the Investment Statement. NZXR is satisfied that this condition will inform Noteholders that upon the occurrence of a non-viability trigger event, the market will not be given advance notice; c. the condition in paragraph 13(b) will ensure that Noteholders will have notice of all information about Conversion that is known at the date of the Investment Statement. The condition in paragraph 13(a) will ensure that all other information that is required to be disclosed under Rule 7.12.2 is disclosed as soon as practicable; and d. if a non-viability trigger event occurs, the terms of the Deed Poll require BNZ to give notice to Noteholders as soon as practicable, that Conversion has occurred. Waiver from Rules 10.3 and 10.4 Decision 18. Subject to the conditions in paragraph 19 below, and on the basis that the information provided by BNZ is complete and accurate in all material respects, NZXR grants BNZ a waiver from Rules 10.3 and 10.4 in respect of Debt Securities issued by BNZ. 19. The waiver contained in paragraph 18 is granted on the following conditions: a. BNZ's most recent disclosure statement (and any supplementary disclosure statement) is available on BNZ's website and by contacting BNZ's registered office; b. a copy of BNZ's most recent disclosure statement (and any supplementary disclosure statement) is sent to NZX by way of the market announcement platform on an ongoing basis no later than it is made publicly available elsewhere; and c. if BNZ is required to provide a notification of interest payment under Rule 7.12.2, holders of the BNZ Notes are notified by way of a sentence included on each notification that BNZ's latest disclosure statement (and any supplementary disclosure statement) is available for review at any of the places mentioned in paragraph 16(a). 20. The information on which this decision is based is set out in Appendix One to this decision. This waiver will not apply if that information is not or ceases to be full and accurate in all material respects. 21. The Rules to which this decision relates are set out in Appendix Two to this decision. 22. Capitalised terms that are not defined in this decision have the meanings given to them in the Rules. Reasons 23. In coming to the decision to provide the waiver set out in paragraph 15 above, NZXR has considered that: a. the level of regulation that BNZ is already subject to as a registered bank; including the requirement to prepare a disclosure statement quarterly in accordance with the Registered Bank Disclosure Statement (New Zealand Incorporated Registered Banks) Order 2014; b. NZXR is satisfied with the level of disclosure in the disclosure statements and the conditions of the waiver ensure that the latest disclosure statement will be easily accessible to the investors; c. BNZ is still subject to its continuous disclosure obligations under Rule 10.1, which requires BNZ to disclose any Material Information; and d. there is precedent for this decision Confidentiality 30. BNZ has requested that this application and any decision be kept confidential until BNZ has announced the offer of the BNZ Notes. 31. In accordance with Footnote 1 to Rule 1.11.2, NZXR grants BNZ's request. Appendix One 1. Bank of New Zealand ("BNZ") is a Listed Issuer that does not have any securities Quoted on either the NZX Main Board or the NZX Debt Market ("NZDX"). 2. BNZ intends to offer up to $300 million of subordinated unsecured notes, with the ability to accept an unlimited amount of oversubscriptions ("BNZ Notes"). 3. The BNZ Notes will be classified as Tier 2 capital, for BNZ under both the Reserve Bank of New Zealand's ("RBNZ") standards; and National Australia Bank Limited ("NAB") under the Australian Prudential Regulation Authority's ("APRA") standards. 4. BNZ may elect to redeem all or some of the BNZ Notes on each interest payment date, after five years or thereafter from the BNZ Notes' allotment date ("Optional Redemption Date"), or if a specified tax or regulatory event occurs. Redemption is subject to certain conditions being satisfied, including BNZ obtaining the consent of the RBNZ and the APRA. 5. BNZ must redeem all of the BNZ Notes that have not previously been redeemed, converted, or written off, ten years after BNZ Notes' allotment date ("Maturity Date"). 6. To qualify as Tier 2 capital, an instrument must fulfil certain criteria, including providing a permanent and unrestricted commitment of funds, and being freely available to absorb losses, if the bank is in financial stress. The terms of the BNZ Notes must meet these criteria, in particular: a. Subordination: BNZ Notes are subordinated in right of repayment to all depositors and unsubordinated creditors of BNZ b. Term: BNZ Notes have a term of ten years, subject to BNZ's right to redeem the BNZ Notes on the Optional Redemption Date, or if a specified tax or regulatory event occurs. Redemption prior to the Maturity Date is subject to certain conditions being satisfied, including BNZ obtaining the consent of the RBNZ and APRA. c. Interest Payments: Interest payments are scheduled to be paid quarterly in arrear, but are subject to the condition that BNZ is solvent at the time that the interest payment is due and BNZ will remain solvent immediately after the payment is made. d. Loss absorption: all or some of the BNZ Notes may be required to be converted into ordinary shares in NAB if a non-viability trigger event occurs in respect of either BNZ or NAB. The point of non-viability is determined by either the RBNZ or the statutory manager (in the case of BNZ) or APRA (in the case of NAB). Loss absorption occurs as follows: i. If BNZ is required to convert BNZ Notes because a non-viability trigger event has occurred: 1. each BNZ Note that is to be converted will be transferred by the relevant holder to National Australia Group (NZ) Limited (BNZ's immediate holding company); and 2. NAB will issue to the relevant holder a number of ordinary shares in NAB, determined in accordance with a formula set out in the deed poll for the BNZ Notes ("Deed Poll"), (together, the "Conversion"); ii. As a consequence of Conversion, holders will cease to hold the BNZ Notes that have been Converted, and they will cease to have any rights under the BNZ Notes; instead, they will hold ordinary shares in NAB. If for any reason the BNZ Notes that are to be Converted are not able to be Converted when required following a non-viability trigger event, those BNZ Notes will be written off. 7. As a registered bank, BNZ is subject to the prudential supervision of the RBNZ. Among other requirements, BNZ must publish quarterly disclosure statements which contain financial information about BNZ. Appendix Two Rule 3.2 Trust Deeds for Debt Securities Rule 3.2.1 Every Trust Deed governing Debt Securities shall provide that: (a) the appointment of new trustee is to be approved by an extraordinary resolution of the holders of the Securities to which the Trust Deed relates; and Rule 7.12 Announcements Rule 7.12.2 Where any benefit is to be paid or distributed on Quoted Securities (including dividends, interest or bonus issues) or any Conversion of Securities or call on Securities is to take place, the Issuer shall give to NZX, forthwith after any Director's recommendation and at least 10 Business Days before the Record Date to determine entitlements or obligations, full details of the benefit, Conversion or call, including the information in the table below. That information shall be supplied in the form set out in Appendix 7. Event Information Required Dividend - Security description - ISIN - Total amount of dividend - Cents per share - Imputation tax credits per share (where applicable to six decimal places) - Withholding tax cents per share (where applicable to six decimal places) - Source of dividend - Payable date - Record Date - Strike price for any issue in lieu of dividend - Excluded income per share (PIE Issuers only, where applicable to six decimal places) - Foreign dividend payment credits per share (where applicable to six decimal places) Interest Details no less than the equivalent required above for a dividend. Bonus Issue Full details of the issue including timing, entitlement and tax information. Conversions Full details of the nature and timing of the Conversion including pricing, entitlement and conversion ratio information. Calls Full details of the call including the Securities affected, and payment details. Rule 10.3 Preliminary Announcements Rule 10.3.1 Each Issuer shall make an announcement pursuant to Rule 10.3.2 through NZX for public release, in the manner prescribed by Rule 10.2 as soon as the Material Information is available, and in any event; (a) before the release of each annual report, and not later than 60 days after the end of the financial year to which that report relates; and (b) before the release of each half-year report and not later than 60 days after the end of the financial half-year to which that report relates. Rule 10.3.2 Each preliminary announcement, whether for a full year or a half year, shall include the information and otherwise address the matters specified by the relevant section of Appendix 1. Rule 10.4 Annual and Half-Year Reports Rule 10.4.1 Subject to Rule 10.4.3 each Issuer shall within three months of the end of each Issuer's financial years: (a) Deliver to NZX electronically, in the format specified by NZX from time to time; and (b) Make available to each Quoted Security holder in accordance with Rule 10.4.4, an annual report. That annual report shall be delivered to NZX before or at the same time as it is made available to Quoted Security holders in accordance with Rule 10.4.4, and shall contain all information: (c) required by law; (d) required in a preliminary announcement by Rule 10.3.2; and (e) required by Rule 10.4.4, Rule 10.4.5 and Rule 10.4.7. The financial statements in that annual report shall be audited and shall be accompanied by an audit report in accordance with the requirements of the Financial Reporting Act 1993. Rule 10.4.2 Each Issuer shall within three months after the end of the first six months of each financial year of the Issuer: (a) deliver to NZX electronically, in the format specified by NZX from time to time; and (b) make available to each Quoted Security holder in accordance with Rule 10.4.4, a half-year report. That half-year report shall be delivered to NZX before, or at the same time as, it is made available to Quoted Security Holders in accordance with Rule 10.4.4. That half-year report shall include the information and otherwise address the matters prescribed by the relevant section of Appendix 1. Rule 10.4.3 An Issuer that is a State enterprise (as defined in the State-Owned Enterprises Act 1986) is not required to issue to its Quoted Security holders an annual report (in accordance with Rule 10.4.1) or a half-year report (in accordance with Rule 10.4.2) until that annual report or half-year report has been provided to the Minister responsible for the State enterprise in accordance with the requirements of the State-Owned Enterprises Act 1986 and laid by that Minister responsible for that State enterprise before the House of Representatives in accordance with the State Owned Enterprises Act 1986 or published in the Gazette under section 17(2A) of the State-Owned Enterprises Act 1986, whichever is the earlier. Rule 10.4.4 An Issuer shall make an annual or half-year report available to Quoted Security holders as required by Rule 10.4.1 or Rule 10.4.2, by sending to Quoted Security holders either: (a) A copy of the annual report or half-year report (as the case may be); or (b) A notice containing the statements referred to in section 209(3) of the Companies Act 1993 and complying with sections 209A and 209B of the Companies Act 1993. Provided that for the purposes of Rule 10.4.4 and Rule 10.4.6, sections 209 to 209B of the Companies Act 1993 shall be deemed modified so that: (c) references in that section to "shareholders" shall be deemed to be references to members of the relevant Class of Quoted Security holders of that Issuer; and (d) in respect of an Issuer which is not a company, references to "company" shall be deemed to be references to the Issuer; and (e) in respect of a Managed Fund, references to "board of a company" shall be deemed to be references to the Manager; and (f) references to "annual report" shall (for the purposes of compliance with Rule 10.4.2) be deemed to be a reference to a half-year report; and (g) section 209(3)(d) shall not apply to the half-year report; and (h) references to "annual report" shall be deemed to be references to an annual report as required by Rule 10.4.1. Provided also that an Issuer will be deemed to have made any half-year report available to Quoted Security holders if that Issuer's most recent annual notification under Rule 10.4.4(b) explicitly stated that it applied to the next half-year report under the Rules. Where a half-year report is deemed to have been made available in this way, a Quoted Security holder's election in respect of receipt of the relevant annual report, if any, shall apply in connection with that half-year report, except that an election to receive a concise annual report must be treated to include an election to receive the relevant half-year report. Rule 10.4.5 The annual report of an Issuer shall contain: (a) the information required to be published by Sub part 3 of Part 2 of the Securities Markets Act 1988 and, in the case of a company registered under the Companies Act 1993, the information required by section 211 of that Act; and (b) the names and holdings of Equity Securities of the holders having the 20 largest holdings of Quoted Equity Securities on the register of the Issuer as at a date not earlier than 2 months before the date of the publication of the annual report; and (c) the Equity Securities, and Securities that may Convert to Equity Securities, in which each Director has a Relevant Interest at the balance date of the current financial year; and (d) details of the spread of Quoted Security holders at a date not earlier than 2 months before the date of the publication of the annual report; and (e) the current credit rating status (if any) of the Issuer; and (f) a summary of all waivers: (i) granted and published by NZX in the 12 month period preceding the balance date of the Issuer (or a reference to where a summary of waivers are published on the Issuer's website, which summary must be available until publication of the next annual report); and (ii) relied upon by the Issuer. (g) details of any exercise of NZX's powers set out in Rule 5.4.2 where the exercise is already public knowledge; and (h) a statement of any corporate governance policies, practices and processes, adopted or followed by the Issuer; and (i) a statement on whether and, if so, how the corporate governance principles adopted or followed by the Issuer materially differ from the Corporate Governance Best Practice Code or a clear reference to where such statement may be found on the Issuer's public website; and (j) a quantitative breakdown, as to the gender composition of the Issuer's Directors and Officers as at the Issuer's balance date and including comparative figures for the prior balance date of the Issuer. Comparative figures are not required to be provided in respect of balance dates falling in periods before the effective date of this Rule; and (k) a statement from the Board of the Issuer providing its evaluation of the Issuer's performance with respect to its diversity policy (if applicable); and (l) a statement as to which of its Directors are Independent Directors and which of its Directors are not Independent Directors, as at the balance date of the Issuer; and (m) details of any Director who has been appointed pursuant to provisions of the Constitution complying with Rule 3.3.8, and the Security holder which appointed that Director. Rule 10.4.6 Where a concise annual report is prepared in relation to the same accounting period as an annual report, that report shall contain: (a) The disclosures required by section 209(5) of the Companies Act 1993 (modified in the manner set out in Rule 10.4.4; and (b) The information required by Rule 10.4.5(e), Rule 10.4.5(f) and 10.4.5(g). Rule 10.4.7 Any Issuer which extends its half-year reporting period or changes its annual balance date to a later date shall make a report containing such information, and to be released at such time, as NZX shall require in respect of the existing half-year reporting period or the period ending on the existing balance date. Rule 10.4.8 Each Issuer shall supply to any Advisor or Trading Participant who so requests, free of charge, a copy of any document referred to in Rule 10.3 or Rule 10.4. ... End CA:00273195 For:BNZ Type:WAV/RULE Time:2015-11-11 10:10:08
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