How Australia hybrid first clarifies Basel III implementation

Author: Ashley Lee | Published: 12 Sep 2012

The first Basel III-compliant Tier 1 hybrid bond to be issued by an Australian bank acts as a regulatory test case on Basel III implementation in the country.

The Commonwealth Bank of Australia’s (CBA) Perpetual Exchangeable Resalable Listed Securities VI (PERLS VI) will make clear how Australian Prudential Regulatory Authority (Apra) rules on Basel III implementation apply.

Basel III’s minimum capital ratios and regulatory adjustments come into force in Australia on 1 January 2013.

King & Wood Mallesons’ Sydney head Shannon Finch, who advised joint lead arrangers CBA’s Capital Markets Division and Morgan Stanley Australia Securities, said the transaction should be a good starting point for issuers to engage with Apra on Basel III implementation.

Basel III concerns: immediate non-viability triggers  

Recent hybrid issuances in Australia, such as...



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