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BOQ halts trading, launches capital raising

The non-major suspended trading on Monday to raise $275 million from investors, in a bid to strengthen its capital position.  

BOQ has resumed regular trading on the ASX after halting trading on Monday (25 November) to launch a $275 million capital raising.

The capital raising comprises of:

  • a fully underwritten $250-million institutional share placement, and
  • a non-underwritten share purchase plan (SPP) under which BOQ is targeting to raise approximately $25 million.

According to BOQ, the capital raising will be used to strengthen its balance sheet, provide an increased buffer above the Australian Prudential Regulation Authority’s (APRA) “unquestionably strong” common equity tier 1 (CET1) capital ratio benchmark, and to create “additional capacity for BOQ to implement its strategic priorities”.

The share offer is expected to add approximately 80 to 88 basis points to BOQ’s Level 2 CET1 capital ratio.

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Placement

BOQ noted that the final issue price of the placement will be determined by way of a variable price book-build across $7.69-$7.78 per new share, which represents a 10 per cent-11 per cent discount on the last close price listed on the ASX of $8.64.

The placement is underwritten at a floor price of $7.69 per new share.

The bank noted that the placement would result in approximately 32.5 million new shares being issued at the floor price, representing approximately 8 per cent of BOQ’s existing issued capital.

New shares under the placement are expected to settle on 28 November and commence trading on the ASX on 29 November 2019.

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SPP

Meanwhile, under the SPP, each eligible BOQ shareholder will have the opportunity to apply for up to $30,000 of new fully paid ordinary shares without incurring brokerage or transaction costs. The SPP will also be offered to eligible custodians to participate in the SPP on behalf of certain eligible beneficiaries.

BOQ stated that it may scale back applications should it receive demand above the target of approximately $25 million or issue a higher amount above that target, at its absolute discretion.

 The issue price per SPP share will be the lesser of:

  • the placement price; and
  • the volume weighted average price of BOQ shares traded on the ASX during the five trading days up to, and including, the SPP closing date less a 2 per cent discount, rounded down to the nearest cent.

BOQ noted that both new placement and SSP shares will rank equally with existing shares.

The non-major is the latest bank to launch a capital raise after Westpac raised approximately $2.5 billion earlier this month also aimed at providing an increased buffer above APRA’S “unquestionably strong” CET 1 ratio.

[Related: Westpac launches second phase of $2.5bn capital raising]

BOQ halts trading, launches capital raising
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Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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