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.
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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.
