Suncorp Group Limited has launched its first wholesale Additional Tier 1 (AT1) capital notes offer to institutional and other wholesale investors, the initial transaction to be issued under its Wholesale Note Issuance Programme.
The Australian dollar-denominated Wholesale Capital Notes are perpetual, non-cumulative, convertible, unsecured, and subordinated debt obligations of Suncorp. The offer is limited to institutional investors and other wholesale investors and is not open to retail investors. Each note has a notional face value of $10,000. The minimum subscription amount is $500,000, unless the notes are issued in a way that does not require disclosure under Chapter 6D or Chapter 7 of the Corporations Act. The transaction is being conducted under an information memorandum rather than a prospectus, consistent with wholesale-only issuance. Pricing for the Wholesale Capital Notes was set via a bookbuild held on April 29, 2026. Suncorp has priced a $200 million issue, with the margin set at 235 basis points over the three‑month bank bill swap rate. Settlement and issuance are expected on or around May 6, 2026. Suncorp has stated that no shareholder approval is required for the issue.
Suncorp expects to use the proceeds of the Wholesale Capital Notes to fund Additional Tier 1 Capital, as defined in the Australian Prudential Regulation Authority (APRA) prudential standards, for one or more regulated entities within the Suncorp Group. Any remaining proceeds may be used for general funding and capital management purposes. The issuance forms part of Suncorp Group’s broader funding and capital management approach, including adjustments to capital levels across its regulated entities and the use of wholesale instruments that qualify as regulatory capital. Within the Australian market, the notes sit alongside other APRA-recognised AT1 instruments with equity conversion and loss‑absorption features. Suncorp has noted that investors should not assume APRA will give approval for any early redemption of the notes. Prospective holders are directed to the information memorandum for details of the terms, conditions, and risk factors.
The Wholesale Capital Notes are fully paid, subordinated, perpetual, unguaranteed, and unsecured instruments. They are scheduled to pay floating‑rate quarterly distributions in arrears, calculated as the three‑month bank bill swap rate plus the agreed margin and adjusted for franking. Distributions are discretionary and subject to no Payment Condition existing at the relevant date. If a distribution is not paid because a Payment Condition exists, that amount does not accrue and will not be paid at a later time. Suncorp expects distributions on the notes to be fully franked while they remain on issue.
Subject to APRA’s prior written approval, Suncorp may elect to exchange the notes on June 17, 2032, Sept. 17, 2032, or Dec. 17, 2032. Exchange may also occur on the happening of specified tax or regulatory events. Under the terms, exchange may take the form of conversion, redemption, or resale. If the notes are not exchanged earlier, they are scheduled for mandatory conversion into Suncorp ordinary shares on Dec. 17, 2034, provided the relevant conversion conditions are met. Payment and exchange dates may be adjusted in line with the applicable business day convention. Holders do not have a right to require conversion or early redemption.
Consistent with APRA’s capital framework, the Wholesale Capital Notes include non‑viability and acquisition event provisions. If APRA provides a written determination that a Non‑Viability Trigger Event has occurred in relation to Suncorp, all, or in some circumstances a portion, of the notes must be immediately converted into Suncorp ordinary shares. If conversion required on non‑viability does not occur within five business days for any reason, the notes will be written off. In that case, all rights in respect of the notes, including rights to distributions and to the return of capital, will be immediately and irrevocably terminated, and holders will lose the value of the notes without compensation. Suncorp must also convert all notes if an Acquisition Event occurs and may, subject to APRA approval, elect to exchange all notes if a Potential Acquisition Event occurs, as those terms are defined in the information memorandum.
The AT1 offer follows Suncorp’s establishment of a Wholesale Note Issuance Programme on April 24, 2026. The programme sets out a framework for issuing Wholesale Capital Notes and Wholesale Tier 2 subordinated notes from time to time to meet funding and regulatory capital requirements. Commenting on the outcome of the bookbuild, Neil Wesley, Suncorp acting chief financial officer, said: “It was pleasing to see the strong demand for our inaugural Wholesale Capital Note issuance, which was more than 4 times oversubscribed. The ability to diversify our investor base and capital instruments into this market is a reflection of the confidence our investors continue to place in Suncorp, and we thank them for their support.” National Australia Bank Limited is acting as arranger and joint lead manager for the Wholesale Capital Notes. Barrenjoey Markets Pty Limited, UBS AG, and Westpac Banking Corporation are acting as joint lead managers.
