AMP : announces launch of AMP capital notes offer

AMP Limited (AMP) has today announced the launch of the offer of new additional tier 1 capital securities, AMP capital notes (capital notes).

AMP is seeking to raise A$200 million through the issue of capital notes, with the ability to raise a higher or lower amount.

The offer is expected to open on 26 October 2015 and will be made to eligible securityholders, institutional investors, clients of syndicate brokers and members of the public who satisfy the requirements set out in the prospectus.

Capital notes are expected to be listed on the ASX under the code 'AMPPA'. Capital notes are expected to begin trading, initially on a deferred settlement basis, on the ASX on 1 December 2015.Capital notes have a face value of A$100. The minimum investment is 50 capital notes (A$5,000), and in multiples of 10 capital notes (A$1,000) thereafter.

'The capital notes issue is part of the AMP group's ongoing funding and capital management strategy,' said AMP Chief Financial Officer, Gordon Lefevre.

'The proceeds will further strengthen the group's capital base and meet general funding requirements, including to fund additional tier 1 capital of one or more APRA regulated entities within the group,' Mr Lefevre said.

The issuance, along with the AMP Wholesale Capital Notes issued earlier in the year, are in anticipation of the loss of transitional arrangements on the existing A$600m AXA Subordinated Notes as regulatory capital in March 2016.

The key features of capital notes include:

• Capital notes are new perpetual, convertible, subordinated and unsecured securities being issued by AMP.
• Capital notes are designed to pay discretionary, non-cumulative and quarterly floating rate distributions.
• Distributions are expected to be franked at the same rate as dividends on AMP shares (currently 85%) and the cash distribution will be reduced by a factor reflecting the value of any franking credits.
• The distribution rate will be the sum of the bank bill rate plus the margin.
• The margin will be determined under the bookbuild, and is expected to be in the range of 5.10 per cent to 5.30 per cent per annum.
• Capital notes may be exchanged (via conversion into AMP shares or via redemption or resale for cash) at AMP's option on 22 December 2021 or following the occurrence of a tax event or regulatory event, in each case subject to the prior written approval of APRA (which is at APRA's discretion and may not be given).
• Capital notes will mandatorily convert into AMP shares on 22 December 2023 (subject to certain conditions being satisfied). If the conditions to mandatory conversion are not met on 22 December 2023, AMP must convert all capital notes on the first distribution date after

22 December 2023 on which the conditions to mandatory conversion are satisfied. It is possible these conditions may never be met, and in this case the capital notes will remain on issue.

• Capital notes will also be converted into AMP shares or written-off if a non-viability event occurs. A non-viability event could be expected to include serious impairment of AMP and AMP group's financial position and insolvency.

The offer is being made under a prospectus lodged with ASIC. There are risks associated with an investment in capital notes and investors should read the prospectus in full before deciding to invest. Potential investors should also consider obtaining guidance from a financial adviser or other professional adviser before deciding whether to invest.

Capital notes are unsecured and subordinated. They are not deposits or policy liabilities of, or guaranteed by, any member of the AMP group and are not guaranteed by the government or any other entity.

Interested investors can access the prospectus online at ampcapitalnotes.com.au or by requesting a prospectus by calling the numbers set out below.

A replacement prospectus, containing the margin and application forms, is expected to be available on 3 November 2015, when the offer opens.

Anyone wishing to acquire capital notes will need to complete and submit an application form included in, or accompanying, the replacement prospectus. The securityholder and general offers are expected to close on 20 November 2015 and the broker firm offer is expected to close on 27 November 2015.

UBS AG, Australia Branch has been appointed as arranger and joint lead manager.