NAB to issue hybrid tier 1 securities

In an effort to safeguard bank deposits, NAB looks forward to sell US$500 million in hybrid tier 1 to investors in Europe and Asia.

As stated in a report in Reuters, the National Australia Bank Ltd said on 16 September that the securities will be perpetual, and non-callable for seven years, with a coupon stepping up in 2014, according to a source familiar with the terms.

The issue, to be sold in Europe and Asia, is expected to price this week, the source said.

The offer, to be issued by NAB's New York branch, is jointly managed by Bank of America, Goldman Sachs and HSBC, the source said.

Tier 1 is a form of very liquid capital that banks are required to maintain as a cushion to protect bank deposits.