Suncorp announces $325 million convertible preference share offer



Suncorp lodged a prospectus today with the Australian Securities and Investments Commission to issue convertible preference shares (CPS) at an issue price of $100 each to raise up to $325 million, with the ability to accept oversubscriptions for up to $75 million (Offer). The CPS have been structured to qualify as Non-Innovative Residual Tier 1 Capital under APRA's prudential standards, with the Offer forming part of Suncorp's ongoing capital management strategy.

The Offer opens on 16 May 2008 and provides eligible applicants with the opportunity to invest in CPS, which are fully paid preference shares in the capital of Suncorp. The Offer comprises:

a Securityholder Offer, open to registered holders of ordinary shares, RPS or floating rate capital notes; a Broker Firm Offer, open to clients of syndicate brokers; an Institutional Offer, open to certain institutional investors; and a General Offer, open to all other Australian residents.

The closing date for the Offer is 5.00pm on 4 June 2008 for the Securityholder Offer and General Offer, and 10.00am 10 June 2008 for the Broker Firm Offer. Applications must be for a minimum of $2,000 (20 CPS).

CPS pay investors, subject to their terms, floating rate, quarterly, non-cumulative, preferred dividends which are expected to be fully franked. CPS will mandatorily convert into ordinary shares of Suncorp on 14 June 2013 (subject to certain conditions being satisfied). CPS are expected to receive investment grade credit ratings of 'A-' from Standard & Poor's, 'A2' from Moody's and 'A-' from Fitch Ratings. CPS are expected to be quoted on ASX.

Suncorp chairman John Story said "The Offer is being made as part of the Suncorp Group's ongoing capital management strategy, with the CPS proceeds being used to finance asset growth, repay existing debt and for other general corporate purposes."

The Suncorp Group includes Australia's third largest general insurance group and sixth largest listed bank (based on the size of its loan assets), with an ASX market capitalisation of $13 billion as at 5 May 2008. The Suncorp Group's primary businesses are banking, wealth management and general insurance. As at 31 December 2007, the Suncorp Group had assets of approximately $92 billion, funds under management of over $27 billion and more than 7 million customers in Australia and New Zealand.

Citi, JPMorgan, Macquarie and UBS have been appointed as joint lead managers and joint bookrunners to the Offer.

The Suncorp CPS prospectus is available in electronic form on Suncorp's website, Eligible applicants can pre-register for a free paper copy of the prospectus by calling the CPS InfoLine on 1300 665.

Eligible applicants who have any questions regarding the Offer should call the CPS InfoLine on 1300 665 385.

CPS are convertible preference shares directly issued by Suncorp-Metway Ltd. Dividends on CPS are preferred, non-cumulative, based on a floating rate and expected to be fully franked. Dividends are scheduled to be paid quarterly in arrears, subject to the payment tests. The dividend rate will be calculated each quarter as the sum of the bank bill rate plus the margin, together multiplied by (1 – tax rate). The margin will be determined following the Bookbuild. On 14 June 2013, CPS will convert into a variable number of ordinary shares, unless the mandatory conversion conditions are not satisfied or Suncorp arranges for a nominated third party purchaser to acquire all CPS from holders for $100 each. The mandatory conversion conditions provide protection to holders from receiving less than $101.01 worth of ordinary shares per CPS on conversion based on the volume weighted average price of ordinary shares during the 20 Business Days before the mandatory conversion date. Suncorp may, with the prior approval of APRA, elect to redeem CPS for $100 each if any of the mandatory conversion conditions are not satisfied. CPS may be exchanged before 14 June 2013 if a tax event or regulatory event occurs. CPS must, subject to APRA's prior approval, be exchanged if an acquisition event occurs. Suncorp will apply within seven days for CPS to be quoted on ASX under ASX code 'SUNPC' CPS are expected to receive investment grade credit ratings of 'A-' from Standard & Poor's, 'A2' from Moody's and 'A-' from Fitch Ratings. On a winding-up of Suncorp, CPS rank ahead of ordinary shares, equal with RPS and any other equal ranking securities, but behind all depositors, other creditors and Non-Participating Shares.

Indicative Offer Timetable:

Announcement of Offer and lodgement of Prospectus with ASIC 6 May 2008 Roadshow 7 - 8 May 2008 Bookbuild 13 May 2008 Announcement of Margin and lodgement of Replacement Prospectus with ASIC 14 May 2008 Opening Date for the Offer 16 May 2008 Closing Date for Securityholder Offer and General Offer 5.00pm 4 June 2008 Closing Date for Broker Firm Offer 10.00am 10 June 2008 Settlement Date 11 June 2008 Issue Date 12 June 2008 CPS commence trading on ASX on a deferred settlement basis 13 June 2008 Holding Statements despatched by 18 June 2008 CPS commence trading on ASX on a normal settlement basis 19 June 2008

The key dates for the Offer are indicative only and may change without notice. Suncorp, in consultation with the Joint Lead Managers, may agree to accept late Applications (either generally or in particular cases), to extend any Closing Date, to close the Offer early without notice, or to withdraw the Offer at any time before CPS are issued.

6 May 2008

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