NAB share price backtracks amid $1 billion capital raise

NAB shares are hovering in negative territory so far today.

| More on:
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.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • NAB shares have shed around 1% in Monday morning trading to $30.97 apiece
  • The bank announced its $1 billon capital notes offer to syndicate brokers and institutional investors
  • Proceeds are expected to be allocated to general working purposes

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.

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.

More on Capital Raising

A man sits wide-eyed at a desk with a laptop open and holds one hand to his forehead with an extremely worried look on his face as he reads news of the Bitcoin price falling today on his mobile phone
Capital Raising

This ASX mining share just crashed 37%. Here’s why

Investors have turned sour on this small-cap mining share...

Read more »

A disappointed female investor sits in front of her laptop and puts her hand to her forehead and closes her eyes in disappointment over share price falls
Capital Raising

Paradigm Biopharmaceuticals share price freefalls 27% following $66m cap raise

Paradigm shares have erased all of last week's gains...

Read more »

Female doctor with a mask holds out hand in a stop gesture.
Capital Raising

Up 90% in 2 weeks, here’s why the Paradigm share price has been halted

The biopharmaceutical company is planning a capital raise.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Capital Raising

Why did the Arafura share price plunge 19% today?

The mineral exporer emerged from a trading halt this morning.

Read more »

A man sits uncomfortably at his laptop computer in an outdoor location at a table with trees in the background as he clutches the back of his neck with a wincing look on his face.
Capital Raising

Orica share price plummets 10% following successful cap raise

The stock has returned to trade this morning, posting a disappointing tumble.

Read more »

A person wrapped in warm clothing with head, eyes and face covered by a hat, glasses and a scarf is coated in a layer of snow and ice. representing Strike Energy's trading halt today
Share Market News

Copper and cash: Why this ASX mining share is on ice today

What did Cobre Limited announce this morning?

Read more »

Falling ASX share price represented by toddler nosediving over cushion onto floor
Capital Raising

Why is the Bubs share price sinking 7% on Friday?

What's caused Bubs shares to tumble today?

Read more »

Giant magnet attracting banknotes to symbolise a capital raising
Bank Shares

ANZ share price edges lower after capital raising

ANZ has raised funds for the Suncorp Bank acquisition...

Read more »