Commonwealth Bank of Australia · ASX:CBA
Commonwealth Bank of Australia — Colonial First State Investments — Debt Investor Presentation (April 2005)
29 slides from Commonwealth Bank of Australia's debt investor presentation, Apr 19, 2005
Slide 1: Issue of Colonial First State Hybrid Securities ($650 million)
Colonial First State Investments Issue of Colonial First State Hybrid Securities ($650 million) Cumulative, Non-convertible, Preference Shares issued by Colonial First State Issuer No. 1 Limited 19 April 2005
Slide 2: Disclaimer and important notice
Disclaimer and important notice This information has been prepared by Colonial First State Issuer No.1 Limited ABN 66 111 804 329 (the “Company”). The offer of the Colonial First State Hybrid Securities is made in a prospectus lodged with ASIC on 18 April 2004. If you wish to acquire the securities,
Slide 3: Agenda
Agenda g Offer Summary g Overview of Colonial First State Investments Limited (“CFSI”) g Colonial First State Hybrid Securities g Offer Structure g Appendices 3
Slide 4: Offer summary
Offer summary g Colonial First State Hybrid Securities (“Securities”) are cumulative, non-convertible, preference shares issued by Colonial First State Issuer No.1 Limited (“Issuer”) g Offer of $650 million g Floating rate securities set at a margin of 100 – 120 basis points over 90 day BBSW g Inves
Slide 5: Agenda
Agenda g Offer Summary g Overview of Colonial First State Investments Limited (“CFSI”) g Colonial First State Hybrid Securities g Offer Structure g Appendices 5
Slide 6: Industry context
Industry context g Industry is recovering from impact of bear market g Growth will continue to be underpinned by superannuation g Strong growth in Net Fees Retail Funds Management Market ($bn) ($m) 9 $90 8 $80 7 $70 6 $60 5 $50 4 $40 3 $30 2 $20 1 $10 0 $0 Dec-95 Sep-96 Jun-97 Mar-98 Dec-98 Sep-99 J
Slide 7: CFSI – business profile
CFSI – business profile g Leading Australian funds manager with $82.7 billion of funds under management and administration as at 31 December 2004 g Market leading presence across all parts of the value chain g High performing, diversified asset management g Rapidly growing master trust platform, Fir
Slide 8: Diversified asset management capabilities and product mix
Diversified asset management capabilities and product mix CFSI FUMA – Split by Asset Class^ CFSI FUMA – Split by Product Type# (31 Dec 04) (31 Dec 04) Cash Australian Mandates 26% Wholesale 17% Equities 35% 28% Property - 4% Listed 6% 29% Mortgages 1% 26% 10% FirstChoice Global 18% Fixed Overseas St
Slide 9: Investment performance has been strong across the board
Investment performance has been strong across the board Asset Class Outperformance (1 Yr) Outperformance (3 Yr) Fixed Interest 1.01% 0.69% Global Credit 2.17% 2.06% Australian Equities GDP Plus Large Cap 4.10% 0.35% Australian Equities GDP Plus Small Cap 3.46% (2.96%) Australian Equities Core Large
Slide 10: FirstChoice – successful business model
FirstChoice – successful business model g Mastertrust platform catering to mass market g Manufacturing margin capture g Ability to leverage scale and administration efficiency g Mandate structure FirstChoice FUA# Platform Net Flows^ FUA FUA ($m) ($bn) 16 4,000 14 3,500 12 3,000 10 2,500 8 2,000 6 1,
Slide 11: FirstChoice – well diversified support
FirstChoice – well diversified support Inflows: Managing the FUM: FirstChoice Split by Channel^ FirstChoice Split Internal vs External# CBA Bank External External Network 46% 49% 40% CFS 51% CBA Aligned Advisers 14% Source: Colonial First State Investments ^ channel split based on flows for 6 months
Slide 12: “Net Fees”
“Net Fees” g Notwithstanding strong competition and volatile investment markets, CFSI continues to experience strong growth in fees 2004 ~ $157m FUM&A ($bn) Net Fees ($m) 100 FUM&A (LHS)(1) $81m 90 $76m 90 Net Fees (RHS)(2) $72m 80 $69m 80 $63m $65m $60m 70 70 $54m 60 60 $45m 50 50 40 40 30 30 20 20
Slide 13: Key risks
Key risks g Fee reduction g Reputation g Change in investor preferences (eg., DIY super) g Investment market performance 13
Slide 14: Future strategy
Future strategy g Ongoing commitment to investment management g FirstChoice development g Value g Service g Choice g Distribution/Advice g Increased number and productivity of advisers g Improved quality of advice 14
Slide 15: Agenda
Agenda g Offer Summary g Overview of Colonial First State Investments Limited (“CFSI”) g Colonial First State Hybrid Securities g Offer Structure g Appendices 15
Slide 16: Key terms
Key terms Issuer: g Colonial First State Issuer No. 1 Limited (“Issuer”) Issue Price: g A$100.00 per Security Offer Size: g A$650m Maturity: g Perpetual, subject to redemption g Floating rate quarterly dividend based on (90 day BBSW + Margin) x (1 – T) Dividend Rate: g Margin range of 100 – 120 basi
Slide 17: Key terms (Cont’d)
Key terms (Cont’d) If the Bank exercises an option held by it: Redemption g after the fifth anniversary of issue; or initiated by g on occurrence of an Early Termination Event, the Bank: the Issuer will, as a result, be required to redeem in full the Securities with funds provided by the Bank. g If
Slide 18: Retention
Retention g During Retention Periods distributable profits represented largely by Net Fees must be retained for the benefit of holders of the Securities, rather than being distributed to the Bank group g A Retention Period occurs where: g the Securities are not redeemed after 5 years g when any divi
Slide 19: “Net Fees”
“Net Fees” 2004 ~ $157m Net Fees ($m) FUM&A ($bn) 100 FUM&A (LHS)(1) $81m 90 $76m 90 Net Fees(RHS)(2) $72m 80 $69m 80 $63m $65m $60m 70 70 $54m 60 60 $45m 50 50 40 40 30 30 20 20 10 10 0 0 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02(3) Jun-03(4) Dec-03 Jun-04 Dec-04 g Pro forma dividend coverage approximatel
Slide 20: Investor protections
Investor protections g Issue of additional securities against Net Fees g The Bank may issue additional securities linked to Net Fees if: g rating of the Securities remains at A- or above; and g actuarially determined value of future Assigned Fees attributable to this series is greater than (150% x f
Slide 21: Agenda
Agenda g Offer Summary g Overview of Colonial First State Investments Limited (“CFSI”) g Colonial First State Hybrid Securities g Offer Structure g Appendices 21
Slide 22: Overview of offer structure
Overview of offer structure g Offer of $650 million g Offer to public through Prospectus lodged with ASIC g Priority offer to CBA ordinary shareholders, PERLS and PERLS II holders, and Colonial Financial Advisory Group’s clients g Sole Underwriter & Bookrunner: g Arranger: g Co-Managers: g Commonwea
Slide 23: Bookbuild process
Bookbuild process g The Margin will be determined through an institutional and broker firm Bookbuild g Bookbuild range of 100 to 120 bps over the 90 day BBSW g Bookbuild will open at 9am on Friday 22 April 2005 g Bookbuild will close g at 10am Friday 22 April 2005 for Co-Managers and participating b
Slide 24: Pricing benchmarks
Pricing benchmarks 1.40% 1.20% CFS (A-) Trading Margin 1.00% Bookbuild Range 0.80% Perls II (A-) WBKPA (A-) SGBPA (BBB) 0.60% ANZPA (A-) 0.40% Perls I (A-) Colonial Senior Debt (A+) 0.20% Feb-05 Jul-06 Nov-07 Mar-09 Aug-10 Dec-11 May-13 Sep-14 Jan-16 Term As at ASX close 18 April, 2005 24
Slide 25: Key dates
Key dates Action Date Prospectus lodged with ASIC: g 18 April, 2005 Institutional bookbuild opens: g 9.00am 22 April, 2005 Retail syndicate bids due: g 10.00am 22 April, 2005 Institutional bookbuild closes: g 3.00pm 22 April, 2005 Margin announced: g 26 April, 2005 Public offer opens: g 27 April, 20
Slide 26: Agenda
Agenda g Offer Summary g Overview of Colonial First State Investments Limited (“CFSI”) g Colonial First State Hybrid Securities g Overview of Offer Structure g Appendices 26
Slide 27: Transaction structure
Transaction structure The Bank holds a Call Option to acquire all Ordinary Shares in the Issuer Charitable Charitable Investors Investors Commonwealth Bank Commonwealth Bankof ofAustralia (Bank) Australia (Bank) Trust Trust Hold Securities Holds all The Bank holds all The Bank holds Call Ordinary Sh
Slide 28: Bank restructure
Bank restructure g In February 2005 the Bank announced a proposed restructure which will affect CFSI's Australian funds management business g Under the restructure, which is expected to take place over the next 6 months: g the asset management operations of CFSI are to be transferred to another memb
Slide 29: Independent valuation of “Net Fees”
Independent valuation of “Net Fees”* Value Change from base Sensitivity ($m) ($m) Base (Best Estimate)^ 2,438 Discount Rate +1% -274 Discount Rate -1% 352 Base Sales +10% 192 Base Sales -10% -192 Sales Growth +100 basis points 169 Sales Growth -100 basis points -149 Lapse Rates +10% -182 Lapse Rates
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