REG - Macquarie Group Ltd - Publication of a Prospectus <Origin Href="QuoteRef">MQG.AX</Origin> - Part 9
15/06/2016 07:05
- Part 9: For the preceding part double click ID:nRSO2097Bh
●
(ii) Interest Payment Date(s): ●
(iii) Business Day Convention: [Floating Rate Convention / Following Business Day Convention / Modified Following
Business Day Convention / Preceding Business Day Convention]
(iv) Relevant Financial Centre(s): [London / Brussels / Sydney / Auckland and Wellington / Hong Kong / Toronto /
Singapore]
(v) Manner in which the Interest Rate(s) are to be determined: [ISDA Determination / Screen Rate Determination / BBSW Rate Determination]
(vi) Party responsible for calculating the Interest Rate(s) and Interest Amount(s): Calculation Agent: ●
(vii) ISDA Determination: [Applicable / Not Applicable]
- [Floating Rate Option:] [●]
- [Designated Maturity:] ●
- [Reset Date:] ●
(viii) Screen Rate Determination: [Applicable / Not Applicable]
- [Reference Rate:] [LIBOR / EURIBOR / BBSW / BKBM / HIBOR / BA-CDOR / SIBOR]
- [Interest Determination Date(s):] ●
- [Relevant Screen Page:] ●
- [Relevant Time:] ●
- [Reference Banks:] ●
- [Principal Financial Centre:] [ ● / Condition [5.3(b)(i) / 5.3(b)(ii)] will apply]
(ix) Margin: +/- ●
(x) Minimum Interest Rate: ●
(xi) Maximum Interest Rate: ●
(xii) Day Count Fraction: Actual/365 / Actual/Actual / [Actual/365 (Fixed)] / Actual/360 / 30/360 /
360/360 / [Bond Basis] / 30E/360 / [30E/360 (ISDA)] / [Australian Bond Basis] /
Actual/Actual-ICMA
(xiii) Fallback Interest Rate: ●
(xiv) Representative Amount: ●
16. Zero Coupon PD Debt Instrument Provisions: [Applicable / Not Applicable]
(i) Accrual Yield: [Not Applicable / ● per cent. per annum]
(ii) Amortisation Yield: [Not Applicable / ● per cent. per annum]
(iii) Reference Price: [Not Applicable / ● ]
(iv) Day Count Fraction: ●
17. Fixed/Floating Rate Interest Basis Provisions: [Applicable / Not Applicable]
(i) First Interest Basis: [[Fixed Rate / Floating Rate] [in accordance with paragraph 15/16 above and
Condition 5.4]
(ii) Second Interest Basis: [[Fixed Rate / Floating Rate] [in accordance with paragraph 15/16 above and
Condition 5.4]
(iii) Interest Basis Conversion Date: ●
PROVISIONS RELATING TO REDEMPTION
18. Redemption at Issuer's option (Call): [Not Applicable / Condition 6.2 is Applicable]
(i) Early Redemption Amount (Call): [Outstanding principal amount / ● ]
(i) If redeemable in part: [Applicable / ● ]
(iii) Notice period: [Minimum: 30 / ● days ]
[Maximum: 60 / ● days ]
19. Redemption at PD Debt Instrument Holder's option (Put): [Not Applicable / Condition 6.3 is Applicable]
(i) Early Redemption Amount (Put): [Outstanding principal amount / ● ]
(ii) Notice period: [Minimum: 30 / ● ] days ]
[Maximum: 60 / ● ] days ]
20. Final Redemption Amount of each PD Debt Instrument: [Not Applicable / Maturity Redemption Amount: ● ]
21. Early Redemption Amount
(i) Early Redemption Amount (Tax) (Condition 6.4): [Outstanding principal amount / ● ]
(ii) Early Redemption Amount (Default) (Condition 9.1): [Outstanding principal amount / ● ]
GENERAL PROVISIONS APPLICABLE TO THE PD DEBT INSTRUMENTS
22. Form of PD Debt Instrument:(i) Form: [Bearer / Registered][Bearer (Condition 1.1).Temporary Global PD Debt Instrument
exchangeable for a Permanent Global PD Debt Instrument upon certification as to non
-US beneficial ownership no earlier than 40 days after the completion of distribution
of the PD Debt Instruments as determined by the Issuing and Paying Agent, which is
exchangeable for Definitive PD Debt Instruments in certain limited
circumstances.][Bearer (Condition 1.1)On issue the PD Debt Instruments will be
represented by a PD Debt Instrument in permanent global form, exchangeable for PD
Debt Instruments in definitive form in certain limited circumstances.]
(ii) Type: [Fixed Rate PD Debt Instrument / Floating Rate PD Debt Instrument / Fixed/Floating
Interest Rate Basis PD Debt Instrument / Zero Coupon PD Debt Instrument]
23. Additional Business Centre: [ ● / Not Applicable]
24. Talons for future Coupons to be attached to Definitive PD Debt Instruments (and dates on which such Talons mature): [No / Yes, as the PD Debt Instruments have more than 27 coupon payments, Talons may
be required if, on exchange into definitive form, more than 27 coupon payments are
still to be made]
25. Governing law: [English law / The laws of New South Wales]
26. Place for notices: [ ● / Condition [18.1 / 18.2] will apply]
27. Public Offer: Not Applicable
DISTRIBUTION
28. U.S. Selling Restrictions: TEFRA: [Not Applicable / C Rules / D Rules]
CONFIRMED
MACQUARIE GROUP LIMITED
By:
[Authorised Person]
PART B - OTHER INFORMATION
1. LISTING AND ADMISSION TO TRADING
(i) Listing: Application [has been / will be] made for the PD Debt
Instruments to be listed on the Official List of the UK Listing
Authority with effect from ●
(ii) Admission to trading: Application [has been / will be] made for the PD Debt
Instruments to be admitted to trading on the Regulated Market of
the London Stock Exchange plc with effect from ●
2. RATINGS
Credit Ratings: [The PD Debt Instruments to be issued have not been rated by any
rating agency.] [The PD Debt Instruments to be issued [[have
been rated] / [are expected to be rated]] by the following
ratings agency(ies): [Standard and Poor's (Australia) Pty Ltd:
[ [Additional Paying Agent(s) (if any):] [Not Applicable / ● ]
CMU Lodging Agent [Not Applicable / [Deutsche Bank AG, Hong Kong Branch] / ● ]
Registrar: ●
Transfer Agent: ●
Common Depositary: [Not Applicable / ● ]
Place of delivery of Definitive PD Debt Instruments: ●
10. Macquarie Group Limited
This section sets out information relating to MGL and the nature of its business and provides a description of certain
supervisory and regulatory bodies, as well as regulations to which MGL is subject.
Information about Macquarie Group Limited
MGL is the ultimate holding company for all other companies and entities within the Macquarie Group. As at the date of this
Base Prospectus, MGL is not a subsidiary of, nor controlled by, any other company.
MGL (ABN 94 122 169 279) was incorporated on 12 October 2006 with limited liability for an unlimited duration. It is
incorporated in Australia, registered in Victoria and is regulated by the Corporations Act 2001 of Australia ("Corporations
Act").
The registered office of MGL is at Level 6, 50 Martin Place, Sydney 2000, New South Wales, Australia. MGL's principal place
of business is Level 6, 50 Martin Place, Sydney 2000, New South Wales, Australia. The telephone number of MGL's principal
place of business is + 61 2 8232 3333.
MGL complies with the ASX Corporate Governance Council's Principles of Corporate Governance and Recommendations, except to
the extent publicly disclosed in any annual report of MGL.
MGL is an ASX-listed diversified financial services holding company headquartered in Sydney, Australia and regulated as a
non-operating holding company ("NOHC") of an Australian "authorised deposit-taking institution" ("ADI") by the Australian
Prudential Regulation Authority ("APRA"), the prudential regulator of the Australian financial services industry. The
Macquarie Group provides banking, financial, advisory, investment and funds management services through client driven
businesses which generate income by providing a diversified range of services to clients. The Macquarie Group acts on
behalf of institutional, corporate and retail clients and counterparties around the world.
The Macquarie Group's operations are conducted primarily through two groups - the "Macquarie Bank Group", consisting of
Macquarie B.H. Pty Ltd (the direct parent of MBL) and its controlled entities including MBL and the "Non-Banking Group",
consisting of Macquarie Financial Holdings Limited and its controlled entities and, more specifically, most of the
activities of Macquarie Capital; certain activities of the Cash division of Macquarie Securities and certain activities of
the Derivatives and Trading divisions of Macquarie Securities, in each case, in certain jurisdictions; the Macquarie
Infrastructure and Real Assets division and the Macquarie Investment Management division of Macquarie Asset Management; and
certain assets of the Credit Trading business and certain less financially significant activities of Commodities &
Financial Markets. Further details of the Macquarie Bank Group and the Non-Banking Group are provided below.
On 13 November 2007, MGL became the ultimate holding company of MBL and its controlled entities. As such, the historical
consolidated financial statements of MBL reflect the historical results of operations and financial condition of MGL's
businesses, with certain limited exceptions.
As at 31 March 2016, the Group employed over 14,300 staff and had total assets of A$196.8 billion and total equity of
A$15.7 billion.
For the year ending 31 March 2016, the Group's net operating income was A$10.1 billion and profit attributable to ordinary
equity holders was A$2,063 million, with 68% of the Macquarie Group's total operating income (excluding earnings on capital
and other corporate items) derived from regions outside Australia.
Organisational Structure
As at 31 March 2016, MGL's organisational structure was a follows:
MBL and MGL have corporate governance and policy frameworks that meet APRA's requirements for Australian ADIs and
authorised non-operating holding companies, respectively. The Macquarie Bank Group and the Non-Banking Group operate as
separate sub-groups within MGL with clearly identifiable businesses, separate capital requirements and discrete funding
programmes. Although the Macquarie Bank Group and the Non-Banking Group will operate as separate sub-groups MGL views both
as integral to the Macquarie Group's identity and strategy as they assist the Macquarie Group in continuing to pursue value
adding and diversified business opportunities while meeting APRA requirements.
Shared Services
Macquarie Group provides shared services to both the Macquarie Bank Group and the Non-Banking Group through the Corporate
segment. The Corporate segment is not considered an operating group and comprises four central functions: Risk
Management, Legal and Governance, Financial Management and Corporate Operations. Shared services include: Risk Management,
Finance, Information Technology, Group Treasury, Settlement Services, Equity Markets Operations, Human Resources Services,
Business Services, Company Secretarial, Corporate Communications and Investor Relations Services, Taxation Services,
Business Improvement and Strategy Services, Central Executive Services, other Group-wide Services, Business Shared
Services, and other services as may be agreed from time to time.
Business Overview
The following describes the Macquarie Bank Group and Non-Banking Groups' operations.
Overview of Macquarie Bank Group
MBL is headquartered in Sydney, Australia and is an Australian ADI regulated by APRA that, directly and through
subsidiaries, engages in Australian and international financial services businesses.
MBL began in 1969 as the merchant bank Hill Samuel Australia Limited, a wholly owned subsidiary of Hill Samuel & Co.
Limited, London. Authority for MBL to conduct banking business in Australia was received from the Australian Federal
Treasurer on 28 February, 1985.
MBL's ordinary shares were listed on the Australian Securities Exchanged operated by ASX Limited ("ASX") on 29 July, 1996
until the corporate restructuring of the Macquarie Group in November 2007. Although MBL's ordinary shares are no longer
listed on ASX, MBL's Macquarie Income Securities continue to be listed on ASX and accordingly, MBL remains subject to the
disclosure and other requirements of ASX as they apply to ASX Debt Listings.
As at 31 March 2016, the Macquarie Bank Group conducted its operations in over 21 countries.
The Macquarie Bank Group comprises five operating groups: Corporate & Asset Finance; Banking & Financial Services;
Macquarie Asset Management (excluding the Macquarie Infrastructure and Real Assets division and the Macquarie Investment
Management division); Commodities & Financial Markets (excluding certain assets of the Credit Trading business and some
other less financially significant activities) and Macquarie Securities (excluding certain activities of the Cash division
and certain activities of the Derivatives and Trading division, in each case, in certain jurisdictions).
Overview of Non-Banking Group
The following operating groups, divisions and activities form the Non-Banking Group:
· Macquarie Capital which provides corporate finance advisory and capital market services to corporate and
government clients involved in public and private M&A, debt and equity fund raisings, private equity raisings and corporate
restructuring. It also undertakes principal investing activities.
· Certain activities of the Cash division of Macquarie Securities and certain activities of the Derivatives and
Trading divisions, in each case, in certain jurisdictions. The Cash division is a full-service institutional cash equities
broker in Australia, Asia, South Africa and Canada with a specialised institutional cash equities offering in the United
States and Europe. It provides an equity capital markets service through a joint venture with Macquarie Capital.
· The Macquarie Infrastructure and Real Assets division and Macquarie Investment Management division of Macquarie
Asset Management. Macquarie Infrastructure and Real Assets manages alternative assets, specialising in infrastructure, real
estate, agriculture and energy. Its client base is primarily institutional investors, including global pension funds and
superannuation funds, other institutions and governments. Macquarie Investment Management offers a diverse range of
securities investment management products and capabilities.
· Certain assets of the Credit Trading business and other less financially significant activities of the
Commodities & Financial Markets operating group.
Principal Markets
MGL is an ASX-listed diversified financial services holding company headquartered in Sydney, Australia and regulated as a
non-operating holding company of an Australian ADI by APRA. As a provider of banking, financial, advisory, investment and
funds management services, the Macquarie Group acts on behalf of institutional, corporate and retail clients and
counterparties around the world.
Trend Information
There has been no material adverse change in the prospects of MGL since the date of its last published audited financial
statements (such date being 31 March 2016).
Except as may be described in this Base Prospectus (including as set out under "Risk Factors" on pages 27 to 46 inclusive
of this Base Prospectus) or released to the ASX in compliance with the continuous disclosure requirements of the Listing
Rules of the ASX, there are no known trends, uncertainties, demands, commitments or events that are reasonably likely to
have a material effect on MGL's prospects for at least the current financial year.
Profit Estimate
MGL does not make profit forecasts or estimates.
Lawsuits and Contingent liabilities
The Macquarie Group is a large diversified Australian-based financial institution with a long and successful history. Like
any financial institution, Macquarie Group has been subject to legal claims.
As appropriate, The Macquarie Group makes provisions for and recognises contingent liabilities in respect of actual and
potential claims and proceedings that have not been determined. An assessment of likely losses is made on a case-by-case
basis for the purposes of Macquarie Group's consolidated financial statements and specific provisions that MGL considers
appropriate are made, as described in the Notes to Macquarie Group's consolidated financial statements for the year ended
31 March 2016.
There are no, nor have there been any governmental, legal or arbitration proceedings (including any proceedings which are
pending or threatened of which MGL is aware) in the 12 month period prior to the date of this Base Prospectus, which may
have or have had a significant effect on the financial position or profitability of MGL or the Macquarie Group.
Material Contracts
There are no material contracts that are not entered into in the ordinary course of MGL's business which could result in
MGL or any entity within the Macquarie Group being under an obligation or entitlement that is material to MGL's ability to
meet its obligations to PD Debt Instrument Holders in respect of the PD Debt Instruments.
Principal investment activity
Since the date of Macquarie Group's last published audited financial statements (such date being 31 March 2016), and other
than as released to the ASX prior to the date of this Base Prospectus, MGL has not made any principal investments that are
material to its ability to meet its obligations to PD Debt Instrument Holders in respect of the PD Debt Instruments.
Significant change in MGL's financial position
There has been no significant change in the financial or trading position of MGL or the Macquarie Group since 31 March
2016, and no material adverse change in the financial position or prospects of MGL or the Macquarie Group since 31 March
2016, the date of MGL's last published audited financial statements.
Credit rating
As at the date of this Base Prospectus, MGL has the following debt ratings for long-term unsubordinated unsecured
obligations:
· Standard and Poor's (Australia) Pty Ltd: BBB / Stable;
· Moody's Investors Service Pty Limited: A3 / Stable; and
· Fitch Australia Pty Ltd: A- / Stable.
Shareholders and Capital
As at 31 March 2016, MGL had on issue 340,302,389 fully paid ordinary shares. The ordinary shares of MGL are listed in
Australia on the ASX.
As at the date of this Base Prospectus, MGL is neither directly nor indirectly controlled by any of its shareholders.
Regulatory oversight and recent developments
In Australia, the key regulators that supervise and regulate the Banking Group's activities are APRA, the Reserve Bank of
Australia ("RBA"), Australian Securities and Investments Commission ("ASIC"), the ASX, the Australian Securities Exchange
Limited (as operator of the ASX24 market formerly known as the Sydney Futures Exchange), the Australian Competition and
Consumer Commission ("ACCC") and the Australian Transaction Reports and Analysis Centre ("AUSTRAC").
APRA is the prudential regulator of the Australian financial services industry. APRA establishes and enforces prudential
standards and practices designed to ensure that, under all reasonable circumstances, financial promises made by
institutions under APRA's supervision are met within a stable, efficient and competitive financial system. MGL has
corporate governance and policy frameworks designed to meet APRA's requirements for NOHCs.
The Banking Act confers wide powers on APRA which are to be exercised ultimately for the protection of depositors of ADIs
in Australia and for the promotion of financial system stability in Australia.
In its supervision of the Macquarie Group and other ADIs, APRA focuses on capital adequacy, liquidity, market risk, credit
risk, operational risk, interest rate risk, associations with related entities, large exposures to unrelated entities and
funds management, securitisation, outsourcing and covered bond activities and governance. APRA discharges its
responsibilities by requiring ADIs to regularly provide it with information as requested as well as reports which set forth
a broad range of information, including financial and statistical information relating to their financial position and
information in respect of prudential and other matters. APRA's approach to the assessment of an ADI's capital adequacy and
liquidity risk management is based on the risk based capital adequacy framework set out in the Basel Committee on Banking
Supervisions' ("Basel Committee") publications, "International Convergence of Capital Measurement and Capital Standards a
Revised Framework" ("Basel II"), revised in June 2006 and "A global regulatory framework for more resilient banks and
banking systems" ("Basel III"), released in December 2010 and revised in June 2011.
In exercising its powers, APRA works closely with the RBA. The RBA is Australia's central bank and an active participant
in the financial markets. It also manages Australia's foreign reserves, issues Australian currency notes, serves as a
banker to the Australian Government and, through the Payment Systems Board, supervises the payment system.
ASIC is Australia's corporate, markets and financial services regulator, which regulates Australian companies financial
markets, financial services organisations and professionals who deal and advise in investments, superannuation, insurance,
deposit taking and credit.
ASX is Australia's primary securities market and the Macquarie Income Securities, Macquarie Group Capital Notes and MGL's
ordinary shares are listed on ASX. MGL and the relevant member of the Macquarie Group have contractual obligations to
comply with ASX's listing rules, which have the statutory backing of the Corporations Act 2001 of Australia ("Corporations
Act").
The ASX24 market provides exchange traded and over-the-counter services and regulates the cash and derivative trades that
MGL executes through the ASX24 as a market participant in the ASX24. This business is conducted primarily within the
Macquarie Group.
The ACCC is Australia's competition regulator. Its key responsibilities include ensuring that corporations do not act in a
way that may have the effect of eliminating or reducing competition and pricing practices, and to oversee product safety
and liability issues, pricing practices and third-party access to facilities of national significance. The ACCC's consumer
protection activities complement those of Australia state and territory consumer affairs agencies that administer the
unfair trading legislation of those jurisdictions.
AUSTRAC is Australia's anti-money laundering and counter-terrorism financing regulator and specialist financial
intelligence unit. It works collaboratively with Australian industries and businesses (including certain entities of the
Macquarie Group) in their compliance with anti-money laundering and counter-terrorism financing legislation. As
Australia's financial intelligence unit, AUSTRAC contributes to investigative and law enforcement work to combat financial
crime and prosecute criminals in Australia and overseas.
Revenue authorities undertake risk reviews and audits as part of their normal activities. MGL have assessed those matters
which have been identified in such reviews and audits as well as other taxation claims and litigation, including seeking
advice where appropriate, and consider that the Macquarie Group and the Macquarie Bank Group currently hold appropriate
provisions.
Outside Australia, some of the Macquarie Group's key regulators include the United States Securities Exchange Commission,
the United States Commodity Futures Trading Commission, the United States Financial Industry Regulatory Authority, the
United Kingdom Financial Conduct Authority and Prudential Regulation Authority, the Hong Kong Monetary Authority, the
Monetary Authority of Singapore, the Korean Financial Supervisory Service and the Bank of Korea.
As with other financial services providers, the Macquarie Group continues to face increased supervision and regulation in
most of the jurisdictions in which it operates, particularly in the areas of funding, liquidity, capital adequacy and
prudential regulation.
Basel III framework
The Basel III reforms raise the quality and quantity of the regulatory capital base, enhance the risk coverage of the
capital framework and introduce a leverage ratio as a backstop to the risk-based requirement. The Basel III liquidity
measures are designed to promote the build-up of liquidity buffers that can be drawn down in periods of stress as well as
to ensure sufficient long term funding is in place for long term assets. The Liquidity standards introduce a series of
qualitative measures as well as two specific metrics, being the Liquidity Coverage Ratio ("LCR") and the Net Stable Funding
Ration ("NSFR").
APRA's implementation of the Basel III capital framework began on 1 January 2013, with four prudential standards
implementing the Basel III capital reforms in Australia coming into effect, Macquarie Bank Group is in compliance with the
capital requirements as implemented by APRA.
APRA has implemented both the Basel III qualitative requirements and LCR into local prudential standards. The LCR became a
prudential requirement on 1 January 2015, with a minimum LCR of 100% required of all ADIs subject to the ratio
(notwithstanding the Basel Committee permits a phase-in approach of LCR requirements). The Macquarie Group has fully
complied with the LCR from 1 January 2015. On 31 March 2016, APRA released for consultation a discussion paper outlining
its proposed implementation of the NSFR. It is proposed that the new standard would come into effect on 1 January 2018,
consistent with the international timetable agreed by the Basel Committee. APRA intends to implement the NSFR into local
standards, and therefore the existing prudential liquidity standard will be subject to change prior to this date. The
Macquarie Group expects to comply with the NSFR, however until the final standards are published the overall impact on the
funding structure or businesses of the Macquarie Group and the Macquarie Bank Group is uncertain.
Counterparty credit risk
In September 2012, APRA released its final prudential standards on its implementation of the Basel III reforms to the
capital framework for counterparty credit risk and other credit exposure came into effect on 1 January 2013. Under its
prudential standards, APRA extended its existing capital framework for counterparty credit risk in bilateral transactions
to be the sum of the existing counterparty credit default component that applies under its existing prudential standards
and a risk capital Credit Value Adjustment ("CVA") risk capital charge introduced as part of the Basel III reforms. The
CVA risk capital charge is intended to cover the risk of mark-to-market losses on the expected counterparty credit risk
arising from bilateral OTC derivatives. In January 2013, APRA also adopted Basel III reforms on capital charges for
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