InvestSMART Hybrid Income Portfolio - Portfolio Adjustment
CBA announced a new Tier 1 Hybrid this morning, to be known as “CommBank PERLS X Capital Notes”.
PERLS X will qualify as Tier 1 capital of the Group and the offer is expected to raise $750m, with the ability to raise more or less. They are expected to be quoted under the code CBAPG.
PERLS X are subordinated, unsecured notes, scheduled to pay floating rate distributions quarterly, which are expected to be fully franked. PERLS X have a Call Date of 15 April 2025 and will mandatorily Exchange into Ordinary Shares on 15 April 2027 (subject to certain conditions). PERLS X have an initial Face Value of A$100.
We’re selling our position in ANZPD as they screen as relatively expensive and we look to increase our cash holding to bid into the PERLS X deal. ANZPD is currently weighted at 1.93% of the portfolio.
Frequently Asked Questions about this Article…
The CommBank PERLS X Capital Notes are a new Tier 1 Hybrid security announced by CBA. They are subordinated, unsecured notes that pay floating rate distributions quarterly and are expected to be fully franked.
CBA is aiming to raise $750 million with the PERLS X offer, although there is the flexibility to raise more or less depending on demand.
The PERLS X Capital Notes have a Call Date of 15 April 2025 and are scheduled to mandatorily exchange into ordinary shares on 15 April 2027, subject to certain conditions.
The initial face value of the PERLS X Capital Notes is set at A$100.
The investment portfolio is selling its position in ANZPD because they are considered relatively expensive, and the portfolio aims to increase cash holdings to participate in the PERLS X deal.
ANZPD currently has a weighting of 1.93% in the investment portfolio.
Investing in PERLS X Capital Notes offers the potential for quarterly floating rate distributions that are expected to be fully franked, providing a tax-effective income stream.
The PERLS X Capital Notes are expected to be quoted under the code CBAPG.
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