Macquarie Bank Announces Offer To Purchase For Cash Certain Of Its 6.625% Subordinated Medium-Term Notes, Series A, Due 2021

SYDNEY, June 2, 2016 /PRNewswire/ -- Macquarie Bank Limited (the "Bank"), a wholly-owned subsidiary of Macquarie Group Limited (ASX: MQG), announced today that it has commenced a modified "Dutch Auction" cash tender offer to purchase (the "Tender Offer") up to US$150 million aggregate principal amount (subject to increase, the "Tender Cap") of its outstanding subordinated debt securities (the "Notes"). 

The Tender Offer will expire at 11:59 p.m., New York City time, on June 29, 2016, unless extended or earlier terminated by the Bank in its sole discretion (such date and time, as the same may be extended, the "Expiration Date").  Holders of Notes that validly tender (and do not validly withdraw) their Notes prior to 5:00 p.m., New York City time, on June 15, 2016, unless extended by the Bank in its sole discretion (such date and time, as the same may be extended, the "Early Participation Date"), will be eligible to receive the Total Consideration (as defined below) for their Notes.

The following table summarizes the material pricing terms for each US$1,000 aggregate principal amount of Notes:

The Tender Offer will be conducted on the terms and subject to the conditions set forth in the Offer to Purchase, dated June 2, 2016 (the "Offer to Purchase"), and a related Letter of Transmittal.

Notes tendered by holders on or before the Early Participation Date, and accepted for purchase by the Bank will receive the "Total Consideration", which includes an early tender premium of US$50 per US$1,000 principal amount of Notes validly tendered (the "Early Tender Premium"). Holders who validly tender their Notes after the Early Participation Date will not be eligible to receive the Early Tender Premium and, accordingly, holders whose Notes are validly tendered after the Early Participation Date and on or prior to the Expiration Date and are accepted for payment pursuant to the Tender Offer will receive the "Tender Offer Consideration" consisting of the Total Consideration less the Early Tender Premium.

The Tender Offer is being conducted pursuant to a modified "Dutch Auction."  This means that holders who elect to participate in the Tender Offer prior to the Early Participation Date must specify the maximum spread ("Bid Spread") in excess of the Reference Security set forth in the table above that such holder would be willing to accept as the basis for determining the Total Consideration payable in exchange for each US$1,000 principal amount of Notes tendered (and not validly withdrawn) in the Tender Offer.  For each tender of Notes, the Bank will determine the "Bid Premium" for such tender by subtracting the Bid Spread for the Notes from the Base Spread set forth in the table above. The Bid Spread submitted by any tendering holder must fall within the acceptable Bid Spread range specified in the table above in order to be accepted and used for purposes of calculating the Clearing Spread Premium and will include the Early Tender Premium.  The Bank will use all of the Bid Premiums received for the Notes tendered on or prior to the Early Participation Date to calculate a "Clearing Spread Premium" in accordance with the procedure set forth below.  The Total Consideration, which includes the Early Tender Premium will be equal to an amount that would reflect as of the date of purchase, a yield to the Maturity Date equal to the sum of (i) the yield of the Reference Security as of 2:00 p.m., New York City time, on the Early Acceptance Date (which is expected to be June 16, 2016, the first business day after the Early Participation Date), plus (ii) the Clearing Spread, which consists of the Base Spread set forth in the table above less the Clearing Spread Premium, as determined pursuant to the modified Dutch Auction.

The Clearing Spread Premium for the Notes will be determined by the Bank by consideration of the Bid Premiums of all validly tendered (and not validly withdrawn) Notes on or prior to the Early Participation Date, in order of lowest to highest Bid Premiums. The Clearing Spread Premium will be: (i) the lowest single premium for all tenders of Notes on or prior to the Early Participation Date such that, for all such tenders of Notes whose Bid Spread results in a Bid Premium equal to or less than this lowest single premium, the Bank will be able to accept an aggregate principal amount of Notes up to the Tender Cap under the Tender Offer, taking into account the aggregate principal amount of Notes that have been validly tendered (and not validly withdrawn), and the prorationing described in the Offer to Purchase, or (ii) in the event that the purchase of all the Notes validly tendered (and not validly withdrawn) would result in the Bank acquiring Notes having an aggregate principal amount of less than the Tender Cap under the Tender Offer, the Clearing Spread Premium will be the highest Bid Premium with respect to any Notes validly tendered (and not validly withdrawn).

If the Notes tendered at or below the Clearing Spread Premium would result in an aggregate principal amount in excess of the Tender Cap, then holders of the Notes tendered at the Clearing Spread Premium will be subject to proration as described in the Offer to Purchase. If on the Early Participation Date, the aggregate principal amount of Notes validly tendered (and not validly withdrawn) by holders would cause the Bank to accept an aggregate principal amount of Notes in excess of the Tender Cap, then the Bank will not accept any Notes tendered after the Early Participation Date. Any Notes validly tendered after the Early Participation Date and on or prior to the Expiration Date will be deemed to have been tendered with a bid spread equal to the Tender Offer Consideration and any such tenders after the Early Participation Date will not be used for purposes of calculating the Clearing Spread Premium.

Accrued and unpaid interest will be paid on all Notes validly tendered and accepted for purchase by the Bank from the last interest payment date to, but not including, the date on which the Notes are purchased. The Bank may elect, following the Early Participation Date and prior to the Expiration Date (as defined below), to accept the Notes validly tendered at or prior to the Early Participation Date, provided that all conditions to the Tender Offer have been satisfied or waived by the Bank, and Notes accepted on such date may be settled on such date or promptly thereafter (the "Early Payment Date"). It is anticipated that the Early Payment Date will be June 20, 2016, the third business day after the Early Participation Date.  The "Final Payment Date" is the date that the Bank settles all Notes not previously settled on the Early Payment Date, if any, which the Bank expects to be one business day following the Expiration Date. The Bank currently expects the Early Payment Date to be June 20, 2016, and the Final Payment Date to be June 30, 2016.

As described in the Offer to Purchase, subject to applicable law, the Bank may extend the Tender Offer at any time and may amend or terminate the Tender Offer if, before such time as any Notes have been accepted for payment pursuant to the Tender Offer, any condition of the Tender Offer is not satisfied or waived.

The Tender Offer is not conditioned upon the tender of a minimum principal amount of Notes, but is subject to certain conditions set forth in the Offer to Purchase.

This announcement, including the following, is qualified in its entirety by the Offer to Purchase and, where applicable, the Letter of Transmittal.

The Bank has retained Citigroup Global Markets Inc. ("Citigroup") and J.P. Morgan Securities LLC ("J.P. Morgan") to act as Dealer Managers, D.F. King & Co., Inc. ("D.F. King") to act as Information Agent and D.F. King to act as Tender Agent, in each case in connection with the Tender Offer.  For additional information regarding the terms of the Tender Offer, please contact Citigroup at +1 (800) 558-3745 or J.P. Morgan at +1 (866) 834-4666. Requests for documents and questions regarding the tendering of Notes may be directed to D.F. King by telephone at +1 (800) 283-2170 or by email at [email protected].

This announcement does not constitute an offer to participate in the Tender Offer. The Tender Offer is being made pursuant to the Offer to Purchase and the Letter of Transmittal, copies of which will be delivered to holders of the Notes, and which set forth the complete terms and conditions of the Tender Offer. Holders are urged to read the Offer to Purchase and the Letter of Transmittal carefully before making any decision with respect to their Notes. The Tender Offer is not being made to, nor will the Bank accept tenders of Notes from, holders in any jurisdiction in which it is unlawful to make such an offer or solicitation. None of the Bank, the Dealer Managers, the Information Agent, the Tender Agent or the fiscal agent for the Notes makes any recommendation as to whether holders should tender their Notes in response to the Tender Offer or at what bid spreads holders should tender their Notes.

Certain statements in this announcement, including those describing the completion of the Tender Offer, constitute forward-looking statements. These statements are not historical facts but instead represent only the Bank's belief regarding future events, many of which, by their nature, are inherently uncertain and outside the Bank's control. It is possible that actual results will differ, possibly materially, from the anticipated results indicated in these statements.

SOURCE Macquarie Bank Limited