BoQ taps investors for $350m in capital notes offer

BANK of Queensland has scooped $350 million from investors, including Brisbane property developer and horseracing identity Kevin Seymour, in a special capital notes offer. The final amount is up from Brisbane-based BoQ’s target of $325 million and will be used for general operations and funding the 183-branch lender.

BoQ and rivals have been tapping investors recently with these offers, which are also known as hybrid securities. The Australian Securities and Investments Commission warns investors generally that such securities “may sound like a safe investment, but they are much more complex than a savings account or term deposit”. The notes can be converted into shares in the event of financial difficulty for the issuing bank, meaning people can lose their investment, ASIC said.

The notes for BoQ pay a rate of bank-bill swap rates plus a margin of 3.75 per cent, the lower end of guidance of 3.75 per cent and 3.95 per cent.

Fellow Queensland lender Suncorp in November also raised $375 million paying a rate of bank-bill swap rates plus a margin of 3.65 per cent.

Among investors were the Fiani family from Sydney, which has links to the resources sector. Rounding out No 20 on the list of top investors was Mr Seymour’s privately held Seymour Group.