- National Australia Bank (NAB) is withdrawing its previous capital notes offer just three weeks after it was announced
- NAB Capital Notes Four was originally intended as a capital notes reinvestment arrangement, redeemable in 2027
- Due to ongoing economic instability, NAB’s share price has fallen by a third in the last three weeks
- As a result, the company has stated that the reinvestment offer is no longer viable and will instead redeem all outstanding capital notes on March 23
- NAB is down 8.77 per cent today, with shares trading for $16.54
Markets conditions have forced National Australia Bank (NAB) to withdraw its previous capital notes offer just three weeks after it was announced.
NAB’s Capital Notes 4 were originally announced at the end of February. Through the arrangement, previous NAB capital noteholders who were due to redeem the notes on March 23 would be able to reinvest and receive a Capital Note Four.
The new notes had an individual face value of $100 and were redeemable in September 2027.
However, just three weeks later, the company has announced that market conditions have changed substantially. As a result, NAB is withdrawing the offer. The company believes that the current volatile market would substantially impact the notes’ trading value.
Consequently, the company stated that this in the best interest of stakeholders and the retail investors who’ve expressed interest in the offer.
NAB did state that withdrawing the reinvestment offer would not affect the resale of the original capital notes. All noteholders will receive $100 dollars per note on March 23.
NAB did not consider repricing the offer and stated that this would not be appropriate in the absence of an orderly market.
The company hoped to raise $1.95 billion through the scheme.
Since February 20, when Covid-19’s economic impact began to take hold, the company’s share price has dropped more than 33 per cent. It is currently at its lowest point since 2009.
NAB is down 8.77 per cent today, with shares trading for $16.54 at 11:30 am AEDT.