NAB share price backtracks amid $1 billion capital raise

a woman sits in her home with chin resting on her hand and looking at her laptop computer with some reflection with an assortment of books and documents on her table.a woman sits in her home with chin resting on her hand and looking at her laptop computer with some reflection with an assortment of books and documents on her table.

The National Australia Bank Ltd (ASX: NAB) share price is lower on Monday following an announcement from the banking giant.

At the time of writing, NAB shares are down 1% to $30.97.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is also down 0.44% to 7,207 points.

What did NAB update the ASX with?

According to its announcement, NAB has launched its capital notes 6 offer to syndicate brokers and institutional investors. A capital note is a way for banks to raise money from investors.

The company has allocated around $1 billion, with an expected margin in the range of 3.15% to 3.35% per annum. However, the total amount to be raised will depend on the amount and value of applications received.

The face value is set at $100 per capital note 6, with a minimum investment of $5,000.

Furthermore, the distribution rate [(bank bill rate + margin) x (tax rate)] will be calculated on a quarterly basis.

Unless exchanged earlier, the notes will convert into a variable number of NAB ordinary shares on 17 September 2032.

The capital notes 6 are being issued as part of NAB’s ongoing funding and capital management strategy. Proceeds are expected to be allocated towards general corporate and funding purposes.

The closing date for the capital 6 notes is on 30 June 2022. Settlement is due to take place on 7 July with the notes trading the following day.

About the NAB share price

Over the last 12 months, NAB shares have gained 12% despite short-term volatility swings on the ASX.

The company’s share price is up more than 7% year-to-date.

When looking at valuation terms, NAB commands a market capitalisation of roughly $100 billion with 3.2 billion shares on issue.

The post NAB share price backtracks amid $1 billion capital raise appeared first on The Motley Fool Australia.

Should you invest $1,000 in NAB right now?

Before you consider NAB, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and NAB wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/V4aSLpo

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s