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TEXT-S&P: 38 Hybrids By 8 Australian Banks Off CreditWatch Pos.

Thursday, 4 Oct 2012 | 10:34 PM ET

(The following was released by the rating agency)

MELBOURNE (Standard & Poor's) Oct. 5, 2012--Standard & Poor's Rating Services said today that it has raised its ratings on 38 hybrid capital instruments issued by eight Australian banking groups and their subsidiary companies; and at the same time removed them from CreditWatch with positive implications, where they were placed on Sept. 7, 2012 (see list).

This rating action follows a statement by the Australian Prudential Regulation Authority (APRA), on Sept. 28, 2012, concerning the release of its Basel III capital reform package. The ratings affected by this announcement include those on preference shares, junior subordinated debt, and other hybrid instruments issued by Australian financial institutions. Our counterparty credit ratings on these institutions are unaffected, because our view of the risk profiles of the banks otherwise are unchanged.

In its announcement, which gives effect to the major elements of the Basel III capital reforms in Australia, as of Jan. 1, 2013, APRA has removed the requirement for its approval of payments by Australian-incorporated authorized deposit-taking institutions in relation to Additional Tier 1 and Tier 2 instruments. This development increases Standard & Poor's confidence concerning the repayment capacity of Australian banks on their hybrid capital obligations.

RATINGS LIST To From Preferred Stock (3 issues) BBB+ BBB/WatchPos Junior Subordinated (1 issue) BBB+ BBB/WatchPos ANZ National Bank Ltd. Junior Subordinated (1 issue) BBB+ BBB/WatchPos Commonwealth Bank of Australia Preferred Stock (2 issues) BBB+ BBB/WatchPos Other Preferred Stock (1 issue) BBB BBB-/WatchPos Junior Subordinated (1 issue) BBB+ BBB/WatchPos CBA Capital Trust Junior Subordinated (1 issue) BBB+ BBB/WatchPos CBA Capital Trust II Junior Subordinated (1 issue) BBB+ BBB/WatchPos ASB Capital Ltd. Junior Subordinated (1 issue) BBB+ BBB/WatchPos ASB Capital No.2 Ltd. Junior Subordinated (1 issue) BBB+ BBB/WatchPos Bank of Western Australia Ltd. Junior Subordinated (1 issue) BBB+ BBB/WatchPos Preferred Capital Ltd. Preferred Stock (1 issue) BBB BBB-/WatchPos National Australia Bank Ltd. Preferred Stock (2 issues) BBB+ BBB/WatchPos Junior Subordinated (3 issues) BBB+ BBB/WatchPos National Capital Instruments LLC 2 Junior Subordinated (1 issue) BBB+ BBB/WatchPos National Capital Trust III Junior Subordinated (1 issue) BBB+ BBB/WatchPos BNZ Income Securities Ltd. Preferred Stock (1 issue) BBB+ BBB/WatchPos BNZ Income Securities 2 Ltd. Preferred Stock (1 issue) BBB+ BBB/WatchPos Westpac Banking Corp. Preferred Stock (2 issues) BBB+ BBB/WatchPos Junior Subordinated (3 issues) BBB+ BBB/WatchPos Macquarie Bank Ltd. Preferred Stock (1 issue) BBB- BB+/WatchPos Macquarie Capital Loans Management Ltd. Preferred Stock (1 issue) BB+ BB/WatchPos Macquarie PMI LLC Preferred Stock (1 issue) BB+ BB/WatchPos Macquarie Finance Ltd. Junior Subordinated Debt (1 issue) BBB- BB+/WatchPos Suncorp-Metway Ltd. Preferred Stock (2 issues) A- BBB+/WatchPos Bendigo and Adelaide Bank Ltd. Preferred Stock (2 issues) BBB BBB-/WatchPos Bank of Queensland Ltd. Preferred Stock (1 issue) BBB- BB+/WatchPos

Keywords: MARKETS RATINGS AUSTRALIANBANKS