The major bank has successfully secured $3 billion in capital from domestic and overseas investors in a share placement announced on Monday.
Earlier this week, National Australia Bank (NAB) announced that it would be facilitating a new $3.5-billion capital raise, consisting of a $3-billion fully underwritten institutional share placement plan and a non-underwritten share purchase plan targeting approximately $500 million.
The bank has announced that it has now successfully completed the share placement portion of its raise and will issue approximately 212 million new fully paid ordinary shares to domestic and offshore institutional investors.
According to NAB, eligible institutional shareholders who bid for an amount less than or equal to their “pro rata” share of the placement shares were allocated their full bid, with the balance of the placement shares allocated to existing shareholders.
Additionally, these placement shares will rank equally with existing NAB ordinary shares, but will “not be entitled” to the 2020 interim dividend.
These shares are expected to settle on Thursday, 30 April, and be issued and commence trading on ASX on Friday, 1 May.
NAB has also released further details on its share purchase plan (SPP), which is being offered to “existing eligible shareholders”.
Eligible shareholders will be given the opportunity to apply for up to $30,000 of new fully paid NAB ordinary shares under the SPP, without incurring brokerage fees, commission fees or other transaction costs.
The SPP shares will also rank equally with NAB ordinary shares from their date of issue, noting that they will also not be entitled to the 2020 interim dividend and will be issued after the record date for the 2020 interim dividend.
Eligible shareholders in the SPP, who have a registered address and are a resident in Australia and New Zealand, will be registered as NAB shareholders at 7pm on Friday, 24 April (AEST).
At the time of announcing the raise, NAB said it was aimed at strengthening the bank’s funding position in light of “the uncertain economic outlook due to the COVID-19 pandemic”.
“These actions are intended to provide NAB with sufficient capacity to continue supporting our customers through the challenging times ahead, as well as increasing NAB’s capital level to assist to manage through a range of possible scenarios, including a prolonged and severe economic downturn,” NAB said.
NAB claimed that the offer is expected to increase the group’s common equity tier 1 capital ratio from 10.39 per cent (as at 31 March 2020) to 11.2 per cent.
[Related: Mortgage slump adds to NAB’s earnings woes]