NAB has launched an issue of hybrid securities, targeting a capital raising of A$1 billion or more with an expected margin of 280 to 300 basis points over the 90-day bank bill swap rate. NAB Capital Notes 7 have a first call date of September 2030 and a mandatory conversion date of June 2033. Distributions are expected to be franked and are non-cumulative. The 90-day bank bill rate is currently trading around 4.1 per cent, its highest level in a decade. NAB’s expected margin is 20 bps lower than the most recent issue, Commonwealth Bank’s CommBank PERLS XVI Capital Notes, which was launched in May with an expected margin of 300 to 320 bps and was priced at 300 bps. But it is a little higher than the pricing of 275 bps for ANZ Capital Notes 8 in February. These margin movements reflect the impact of the failures of Silicon Valley Bank and Credit Suisse, whose hybrid securities were written off. The margin impact was modest and has now been clawed back. NAB Capital Notes 7 will qualify as additional tier 1 capital.