KEY POINTS:
A trading halt has been placed on Westpac shares after the bank announced it is launching a A$2.5 billion underwritten share placement.
Westpac Banking Corporation says the move is intended to enhance its balance sheet and position the organisation to capture growth opportunities following its merger with St George Bank.
It says its decision was based on several factors including it becoming more challenging to raise capital through hybrid equity markets; expected increasing demand on the company's balance sheet from maturing corporate bonds; and the impact of the slowing economy and any further deterioration in credit and operating conditions.
The bank says the St George Bank portfolio continues to perform in line with expectations and Westpac has conservatively allowed for $500 million in fair value and acquisition adjustment.
The placement has been fully underwritten by J.P. Morgan, UBS and Morgan Stanley.
The trading halt is likely to remain in place until tomorrow.
- NEWSTALK ZB
