Macquarie Bank prices successful A$700 million capital raising

17 May 2006

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

Macquarie Bank Chief Financial Officer, Mr. Greg Ward, said the Bank had successfully priced an A$700 million capital raising in the domestic and international capital markets today.

The institutional private placement, by way of a bookbuild, will result in the issue of 10,606,061 additional ordinary shares at A$66.00 per ordinary share. The placement  shares will rank pari passu with existing ordinary shares except that they will not participate in the 2006 final dividend to be paid on 5 July 2006.  The price reflects a 2.7% discount to the last close of A$67.86 (adjusted for the fully franked final dividend of A$1.25 per share).

Mr. Ward said the Bank’s Tier 1 capital ratio will increase by approximately 3% to 15.4% as a result of the additional capital raised.

“The issue received strong support from local and international investors and was significantly oversubscribed,” Mr. Ward said.

“It was pleasing that the vast majority of our leading institutional shareholders have participated in the issue, underlying their continued support for our business model,” Mr. Ward said.

Mr Ward said the additional capital raised would be used to facilitate the growth of the Bank’s international expansion opportunities.

“We have experienced unprecedented international growth.  With growth expected to continue, we wish to maintain our strategic flexibility to take advantage of the excellent opportunities available to the Bank,” Mr. Ward said.

Settlement is scheduled to take place on Monday 22 May 2006 and the shares are scheduled to commence trading on an ex-dividend basis on Tuesday 23 May 2006.   Shareholder approval is not required to complete this capital raising and the Bank does not intend to seek shareholder approval in relation to this capital raising.  

The joint lead managers to the issue are Macquarie Equity Capital Markets Limited and J.P. Morgan Australia Limited. 

Mr. Ward also announced that all eligible Bank ordinary share holders will have an opportunity to participate in a capital raising by way of a share purchase plan (SPP). The SPP will provide eligible Bank shareholders with the opportunity to invest up to A$4,950 in the Bank’s ordinary shares at the institutional issue price under the placement, without brokerage or other transaction costs.

Holders of the Bank’s ordinary shares who are registered as at 7.00 pm (AEST) on Friday 19 May 2006 and whose addresses (as recorded in the Bank’s register of members) are in Australia or New Zealand will generally be eligible to participate in the SPP. However, investors who hold their shares via Australian or New Zealand nominees but are not themselves residents of Australia or New Zealand may not be eligible to participate in the SPP. In particular, US residents will not be eligible to participate.  The full terms of the SPP are currently being finalised and will be announced shortly. Application forms will be mailed to eligible Australian and New Zealand Bank ordinary shareholders on or around Friday, 26 May 2006 and the closing date for applications is expected to be Friday, 16 June 2006. The SPP offer will be non-renounceable and shares issued under the SPP are expected to be allotted on or around Friday, 23 June 2006.

Mr. Ward said the Bank has also re-introduced a 2.5% discount for its ordinary share dividend reinvestment plan (DRP), with effect from the 2006 final dividend. Shareholders wishing to amend their DRP participation for the final dividend to be paid on 5 July 2006, must lodge the requisite notice with the Bank’s share registry, Computershare Investor Services, by 5.00pm on Friday 26 May 2006, the record date for the dividend.

For further information, please contact:

Erica Sibree
Investor Relations
Macquarie Bank Limited
Tel: (612) 8232 5008
Mobile: (614) 1302 6309

Matthew Russell
Public Relations
Macquarie Bank Limited
Tel: (612) 8232 4102
Mobile: (614) 1069 9532

This release does not constitute an offer of securities for sale in the United States.  Securities may not be offered or sold in the United States unless they are registered under the U.S. Securities Act of 1933 or an exemption from registration is available.