Woolies perpetual hybrid oversubscribed and tightly priced

The Aussie retailer cuts back orders for its A$600 million in fixed-margin floating-rate notes as they price at the tighter end of the bookbuild range.
Woolworths opened and closed the book on A$600 million worth of hybrid notes in just a few hours after generating A$1.5 billion in interest and orders from more than 50 institutions.

Arrangers Citigroup and UBS priced the deal at 110 basis points over 90-day floating BBSW, giving the notes a yield of 6.97%. While the notes priced at the tight end of the range, they give investors a significant premium on the companyÆs senior debt which trades at about 30bps above bank bills.

The deferrable subordinated perpetual notes are reset quarterly and carry a step-up in year five when the issuer has the ability to redeem them, re-market the notes at a new margin...
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