Macquarie Group is back with an offer of capital notes, looking to raise A$500 million or more with an offer that includes a margin between 300 and 320 basis points.

The pricing of the hybrid, Macquarie Capital Notes 5, is tighter than other recent issues. In November, Westpac paid a margin 340 bps on a $1.4 billion issue, Capital Notes 7.

Bank of Queensland and Bendigo and Adelaide Bank launched hybrid issues in October and both paid a margin of 380 bps.

Back in May last year, when the COVID pandemic was unsettling markets, Macquarie Bank paid a margin of 470 bps on a hybrid issue.

The Macquarie hybrids have a call date of September 2027 and a mandatory exchange date of September 2030.

The securities are fully paid, subordinated, non-cumulative and unsecured. They will qualify as eligible capital.

The distributions are expected to be franked at the same rate as dividends on Macquarie Group’s ordinary shares, which is currently 40 per cent.

BondAdviser issued a report on the issue, rating it “subscribe” but cautioning that the margin “looks tight”.

BondAdviser said: “Supply and demand dynamics are strongly in favour of AT1 primary issuance in the current market, as a wider range of buyers has emerged in recent years in this asset class and their appetite for subordinated paper remains strong.”