Bank of Queensland completed the bookbuild for its latest hybrid issue yesterday, as Bendigo and Adelaide Bank entered the market with a hybrid offer of its own.

BOQ increased the offer size of Capital Notes 2 from A$200 million to $250 million and confirmed that the margin has been set at the bottom end of the range – 380 basis points over the three-month bank bill swap rate.

Bendigo and Adelaide is aiming to raise $350 million on similar terms. The margin is expected to be between 380 bps and 400 bps over three-month BBSW.

In both cases distributions are expected to be fully franked and both will qualify as additional tier 1 capital.

BOQ’s hybrid has an optional redemption date of May 2027 and a conversion date of May 2029 if mandatory conversion conditions are met.

Bendigo and Adelaide’s Capital Notes have an optional redemption date of June 2027 and a conversion date of June 2029, subject to mandatory exchange conditions.

Researcher Bond Adviser has rated both issues “subscribe”, although it also noted: “Looking at how AT1 issuances by BEN and BOQ have performed in the secondary market in the first year after listing shows they have traded below face value at times.

“Although there may be various factors at play here, including the relatively small issue size compared to the big four banks and subsequent liquidity issues, it could also suggest new issue premiums have been inadequate.”