<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 3, 1998
SECURITIES ACT FILE NO. 333-58751
INVESTMENT COMPANY ACT FILE NO. 811-08865
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM N-2
[X] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] PRE-EFFECTIVE AMENDMENT NO. 2
[_] POST-EFFECTIVE AMENDMENT NO.
AND/OR
[X] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X] AMENDMENT NO. 2
(CHECK APPROPRIATE BOX OR BOXES)
--------------
ANZ EXCHANGEABLE PREFERRED TRUST*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
--------------
C/O PUGLISI & ASSOCIATES
850 LIBRARY AVENUE
SUITE 204
NEWARK, DELAWARE 19715
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
--------------
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (302) 738-6680
--------------
RL&F SERVICE CORP.
ONE RODNEY SQUARE
10TH FLOOR
10TH AND KING STREETS
WILMINGTON, DELAWARE 19801
(NAME AND ADDRESS OF AGENT FOR SERVICE)
--------------
COPY TO:
CRAIG E. CHAPMAN, ESQ.
BROWN & WOOD LLP
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048-0557
--------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of this Registration Statement.
If any securities being registered on this form will be offered on a delayed
or continuous basis in reliance on Rule 415 under the Securities Act of 1933,
as amended, other than securities offered in connection with a dividend
reinvestment plan, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<CAPTION>
PROPOSED
AMOUNT MAXIMUM PROPOSED MAXIMUM AMOUNT OF
BEING OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TITLE OF SECURITIES BEING REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE(3)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Trust Units Exchangeable
for Preference Shares
("TrUEPrS")........... 23,000,000 Shares $25.00 $575,000,000 $169,625
</TABLE>
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(1) Includes an aggregate of 3,000,000 TrUEPrS that (i) may be issued in
connection with the exercise of an over-allotment option and (ii) were
subscribed for and purchased by an affiliate of Merrill Lynch, Pierce,
Fenner & Smith Incorporated in connection with the formation of ANZ
Exchangeable Preferred Trust.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Includes $295 previously paid. Payment of $169,330 was transmitted to the
designated lockbox at Mellon Bank in Pittsburgh, PA. in connection with
the filing of Pre-Effective Amendment No. 2.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
* Formerly ABC Exchangeable Preferred Trust.
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<PAGE>
CROSS-REFERENCE SHEET*
<TABLE>
<CAPTION>
ITEM NUMBER IN FORM N-2 CAPTION IN PROSPECTUS
----------------------- ---------------------
<S> <C>
PART A--INFORMATION REQUIRED IN A PROSPECTUS
1. Outside Front Cover............. Front Cover Page
2. Inside Front and Outside Back Front Cover Page; Inside Front Cover Page;
Cover Page...................... Underwriting
3. Fee Table and Synopsis.......... Prospectus Summary; Fee Table
4. Financial Highlights............ Not Applicable
5. Plan of Distribution............ Front Cover Page; Prospectus Summary; Net
Asset Value; Underwriting
6. Selling Shareholders............ Not Applicable
7. Use of Proceeds................. Use of Proceeds and Collateral
Arrangements; Investment Objective and
Policies
8. General Description of the Reg- Front Cover Page; Prospectus Summary; The
istrant......................... Trust; Investment Objective and Policies;
Investment Restrictions; Risk Factors;
Dividends and Distributions; Additional
Information
9. Management...................... Trustees; Management Arrangements
10. Capital Stock, Long-Term Debt
and Other Securities........... Description of the TrUEPrS
11. Defaults and Arrears on Senior
Securities..................... Not Applicable
12. Legal Proceedings.............. Not Applicable
13. Table of Contents of the State-
ment of Additional Informa-
tion........................... Not Applicable
PART B--INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
14. Cover Page..................... Not Applicable
15. Table of Contents.............. Not Applicable
16. General Information and Histo-
ry............................. Not Applicable
17. Investment Objective and Poli- Prospectus Summary; Investment Objective
cies........................... and Policies; Investment Restrictions
18. Management..................... Trustees; Management Arrangements
19. Control Persons and Principal
Holders of Securities.......... Management Arrangements; Underwriting
20. Investment Advisory and Other
Services....................... Management Arrangements
21. Brokerage Allocation and Other
Practices...................... Investment Objective and Policies
22. Tax Status..................... Certain United States Federal Income Tax
Considerations
23. Financial Statements........... Experts; Independent Auditors' Report;
Statement of Assets, Liabilities and
Capital
</TABLE>
PART C--OTHER INFORMATION
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
- --------
* Pursuant to the General Instructions to Form N-2, all information required
to be set forth in Part B: Statement of Additional Information has been
included in Part A: The Prospectus.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 2, 1998
PROSPECTUS
20,000,000 TrUEPrS SM
ANZ EXCHANGEABLE PREFERRED TRUST
----------
Each of the Trust Units Exchangeable for Preference SharesSM ("TrUEPrS")
offered hereby (the "Offering") will represent a proportionate share of a
beneficial ownership interest in the Trust and will be sold at an initial
public offering price of US$25. Except as described herein, holders of the
TrUEPrS will receive non-cumulative dividend distributions in an amount equal
to US$ per TrUEPrS per annum, payable quarterly in arrears in an amount
equal to US$ per TrUEPrS on each January 15, April 15, July 15, and October
15 of each year (each, a "Dividend Payment Date"), to holders of record as of
the immediately preceding January 1, April 1, July 1 and October 1,
respectively (each, a "Record Date"). The first dividend distribution in
respect of the period from and including the original issue date (the "Issue
Date") to but excluding October 15, 1998 will equal US$ per TrUEPrS.
(continued on following page)
SEE "PROSPECTUS SUMMARY--RISK FACTORS," BEGINNING ON PAGE 8 OF THIS
PROSPECTUS, AND "RISK FACTORS," BEGINNING ON PAGE 18 OF THIS PROSPECTUS, FOR
CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE TRUEPRS.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PRICE TO SALES PROCEEDS TO
PUBLIC(1) LOAD(2) TRUST(3)(4)
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<S> <C> <C> <C>
Per TrUEPrS.................................. $25.00 (4) $25.00
- --------------------------------------------------------------------------------
Total(5)..................................... $500,000,000 (4) $500,000,000
</TABLE>
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(1) Plus accrued dividends, if any, from , 1998, or, if the purchase date
is after October 15, 1998, from October 15, 1998.
(2) In view of the fact that the proceeds of the sale of the TrUEPrS will
ultimately be invested in the ANZ Preference Shares, the Trust and ANZ have
agreed to indemnify the several Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(3) Before deducting estimated expenses of $660,000 payable by the Trust.
(4) In view of the fact that the proceeds of the sale of the TrUEPrS will
ultimately be invested in the ANZ Preference Shares, ANZ has agreed to pay
the Underwriters, as compensation (the "Underwriters' Compensation"), $
per TrUEPrS or $ in the aggregate (or $ in the aggregate if the
Underwriters' over-allotment option is exercised in full); provided that
such compensation for sales of more than 10,000 TrUEPrS to any single
purchaser will be $ per TrUEPrS and to the extent of such sales, the
actual amount of Underwriters' Compensation will be less than the aggregate
amounts specified above. See "Underwriting."
(5) The Trust has granted the Underwriters an option, exercisable for 30 days
from the date hereof, to purchase up to 2,996,000 additional TrUEPrS,
solely to cover over-allotments, if any. If all such TrUEPrS are purchased,
the total Price to Public and Proceeds to Trust will be $574,900,000. See
"Underwriting." Also, the total Price to Public and Proceeds to Trust
excludes $100,000 relating to 4,000 TrUEPrS sold to ML IBK Positions, Inc.
in accordance with the requirements of the Investment Company Act of 1940,
as amended.
----------
The TrUEPrS are offered by the several Underwriters, subject to prior sale,
when, as and if issued to and accepted by them, and subject to approval of
certain legal matters by counsel for the Underwriters and certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the TrUEPrS will be made through the facilities of The Depository
Trust Company on or about , 1998.
- -----
SM Service mark of Merrill Lynch & Co., Inc.
----------
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY
----------
The date of this Prospectus is , 1998.
<PAGE>
(continued from cover page)
The Trust is a newly-created Delaware business trust established for the
sole purpose of issuing the TrUEPrS and investing the proceeds thereof in and
holding % Mandatorily Redeemable Debt Securities due 2047 (the "Debt
Securities") issued by Carlotta (UK) Company, a special purpose unlimited
company incorporated under the laws of, and domiciled in, the United Kingdom
(the "U.K. Company"), with an aggregate principal amount equal to such
proceeds. The Trust's investment objective is to distribute to the holders of
TrUEPrS (a) prior to an Exchange Date (as defined herein), pro rata based on
the number of TrUEPrS outstanding the interest the Trust receives on the Debt
Securities from time to time, and (b) upon the occurrence of an Exchange Event
(as defined herein), the proceeds from the redemption of the Debt Securities.
The redemption proceeds of the Debt Securities distributed to holders of
TrUEPrS upon the occurrence of an Exchange Event will be (i) if the Exchange
Event is anything other than a redemption or mandatory repurchase ("Buy-Back")
of the ANZ Preference Shares for cash, American Depositary Receipts ("ADRs")
evidencing, for each TrUEPrS, one American Depositary Share ("ADS")
representing four fully paid non-cumulative preference shares, liquidation
preference US$6.25 per share (the "ANZ Preference Shares"), issued by
Australia and New Zealand Banking Group Limited ("ANZ") and (ii) if the
Exchange Event is a redemption or Buy-Back of the ANZ Preference Shares for
cash, US$25 per TrUEPrS plus an amount equal to the accrued but unpaid
interest on US$25 principal amount of the Debt Securities from and including
the Interest Payment Date immediately preceding the Exchange Date to but
excluding such Exchange Date. Prior to the Exchange Date, the ANZ Preference
Shares will not pay dividends. From and after the Exchange Date (unless the
Exchange Event is the redemption or Buy-Back of the ANZ Preference Shares for
cash), each ANZ Preference Share will accrue non-cumulative dividends at the
rate of US$ per share per annum, payable quarterly in arrears in an amount
equal to US$ per share on each Dividend Payment Date to holders of record
as of the immediately preceding Record Date. See "Investment Objective and
Policies."
The Trust will not be managed like a typical closed-end investment company.
The Trust has adopted a fundamental policy that 100% of its portfolio will be
invested in the Debt Securities and that the Debt Securities may not be
disposed of during the term of the Trust other than in connection with an
Exchange Event. For information concerning the ADSs that may be received by
the holders of TrUEPrS upon the occurrence of an Exchange Event and the ANZ
Preference Shares represented thereby, see the accompanying prospectus of ANZ.
The TrUEPrS are a suitable investment only for investors who are able to
understand the unique nature of the Trust and the economic characteristics of
the Debt Securities and the ADSs and the ANZ Preference Shares that may be
issued upon an Exchange Event. See "Investment Objective and Policies."
The Trust will be treated as a grantor trust for U.S. Federal income tax
purposes. In general, for U.S. Federal income tax purposes no gain or loss
should be recognized by U.S. holders of the TrUEPrS upon receipt of the ADSs
upon an exchange or dissolution of the Trust. However, U.S. holders will
recognize taxable gain or loss upon receipt of cash, if any, upon an exchange
or dissolution of the Trust. See "Taxation--Certain United States Federal
Income Tax Considerations."
Application has been made to list the TrUEPrS on the New York Stock Exchange
(the "NYSE"). Prior to the Offering there has been no public market for the
TrUEPrS. Shares of closed-end investment companies have in the past frequently
traded at a discount from their net asset values and initial public offering
prices. The risk of loss associated with this characteristic of closed-end
investment companies may be greater for investors expecting to sell shares of
a closed-end investment company soon after the completion of an initial public
offering.
This Prospectus sets forth concisely information about the Trust that a
prospective investor should know before investing and should be read and
retained for future reference.
---------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE TRUEPRS AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "UNDERWRITING."
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF, OR AN INVITATION TO
PURCHASE OR SUBSCRIBE FOR, THE TRUEPRS IN THE COMMONWEALTH OF AUSTRALIA OR ANY
OF ITS STATES OR TERRITORIES. THE TRUEPRS MAY NOT BE OFFERED, SOLD OR
DELIVERED IN OR TO ANY RESIDENT OF THE COMMONWEALTH OF AUSTRALIA OR ANY OF ITS
STATES OR TERRITORIES. SEE "UNDERWRITING."
2
<PAGE>
PROSPECTUS SUMMARY
The following summary should be read in conjunction with the more detailed
information appearing elsewhere in this Prospectus. Unless otherwise indicated,
the information contained in this Prospectus assumes that the Underwriters'
over-allotment option is not exercised.
THE TRUST
ANZ Exchangeable Preferred Trust is a newly-created Delaware business trust
that will be registered as a non-diversified closed-end management investment
company under the U.S. Investment Company Act of 1940, as amended (the
"Investment Company Act"). The term of the Trust will expire on or shortly
after the occurrence of an Exchange Event. The Trust will be treated as a
grantor trust for United States Federal income tax purposes.
THE OFFERING
The Trust is offering 20,000,000 TrUEPrS, each representing a proportionate
share of beneficial interest in the Trust, at an initial public offering price
of US$25 per TrUEPrS. The Underwriters have been granted an option, exercisable
for 30 days from the date of this Prospectus, to purchase up to an aggregate of
2,996,000 additional TrUEPrS, solely to cover over-allotments, if any. See
"Underwriting." In accordance with the requirements of the Investment Company
Act, on September 1, 1998, the Trust issued 4,000 TrUEPrS (the "Initial
TrUEPrS") to ML IBK Positions, Inc., an affiliate of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, for the purchase price of US$25 per TrUEPrS.
USE OF PROCEEDS AND COLLATERAL ARRANGEMENTS
The following transactions will take place on the Issue Date. The Trust will
use the proceeds from the sale of the TrUEPrS in the Offering and the Initial
TrUEPrS to subscribe for and purchase from the U.K. Company Debt Securities
with an aggregate principal amount equal to such proceeds. The Trust, as the
holder of the Debt Securities, will be entitled to receive interest due thereon
quarterly in arrears on each Dividend Payment Date (each, an "Interest Payment
Date"), at the rate per annum of %. The Debt Securities will be issued only in
bearer form and will be denominated and pay interest in U.S. dollars. The Debt
Securities will be listed on the Luxembourg Stock Exchange and, unless redeemed
on an earlier Exchange Date, will be redeemed on October 15, 2047. The U.K.
Company will use the proceeds from the sale of the Debt Securities to purchase
at a price equal to their liquidation preference fully paid, non-dividend
paying preference shares, liquidation preference US$25 per share (the "Jersey
Preference Shares"), issued by Carlotta (Investments) Limited, a company
incorporated with limited liability under the laws of, and domiciled in,
Jersey, the Channel Islands (the "Jersey Subsidiary"). The Jersey Subsidiary
will use the proceeds from the sale of the Jersey Preference Shares to make a
payment to ANZ in consideration for the issuance by the ADR depositary to the
Jersey Subsidiary of ADSs at a price per ADS equal to the aggregate liquidation
preference of the four ANZ Preference Shares represented thereby. Pursuant to a
security and pledge agreement (the "ADRs Security and Pledge Agreement") to be
entered into among the Trust, the U.K. Company, the Jersey Subsidiary and The
Bank of New York, as collateral agent (the "Collateral Agent"), the Jersey
Subsidiary will irrevocably and unconditionally deposit ADRs evidencing the
ADSs with the Collateral Agent and pledge the ADRs to secure its redemption
obligations to the U.K. Company under the Jersey Preference Shares and the U.K.
Company, with the consent of the Jersey Subsidiary, will irrevocably and
unconditionally assign and hypothecate such pledge to the Trust to secure its
redemption obligations under the Debt Securities. Pursuant to a separate
security and pledge agreement (the "Jersey Preference Shares Security and
Pledge Agreement" and, together with the ADRs Security and Pledge Agreement,
the "Security and Pledge Agreements") to be entered into among the Trust, the
U.K. Company and the Collateral Agent, the U.K. Company will irrevocably and
unconditionally deposit the Jersey Preference Shares with the Collateral Agent
and pledge the Jersey Preference Shares to secure its obligations to the Trust
under the Debt Securities. Prior to the occurrence of an Exchange Event,
ownership of the Jersey Preference
3
<PAGE>
Shares and the ADSs will remain with the U.K. Company and the Jersey
Subsidiary, respectively, although pursuant to the ADRs Security and Pledge
Agreement, the Jersey Subsidiary will agree to, or will cause the Collateral
Agent to, direct the ADR depositary to vote the ANZ Preference Shares
represented by the ADSs as directed by the holders of the TrUEPrS.
Also on the Issue Date, ANZ will use the proceeds from the issue of the ANZ
Preference Shares to make a capital contribution to a business trust
established under the laws of the State of Delaware (the "Distribution Trust").
The Distribution Trust will use ANZ's capital contribution to make a loan (the
"ANZ Loan") to ANZ or a wholly-owned subsidiary or branch of ANZ (the "ANZ
Borrower").
Reference is made to page 11 for a diagram of the foregoing transactions.
ANZ
Reference is made to the accompanying prospectus of ANZ with respect to the
ANZ Preference Shares represented by the ADSs that may be received by a holder
of TrUEPrS upon the occurrence of an Exchange Event. THE PROSPECTUS OF ANZ IS
BEING ATTACHED HERETO AND DELIVERED TO PROSPECTIVE PURCHASERS OF TRUEPRS
TOGETHER WITH THIS PROSPECTUS FOR CONVENIENCE OF REFERENCE ONLY. THE PROSPECTUS
OF ANZ DOES NOT CONSTITUTE A PART OF THIS PROSPECTUS, NOR IS IT INCORPORATED BY
REFERENCE HEREIN.
INVESTMENT OBJECTIVE AND POLICIES; DIVIDENDS AND DISTRIBUTIONS
The Trust's investment objective is to distribute to the holders of TrUEPrS
(a) prior to an Exchange Date, pro rata based on the number of TrUEPrS
outstanding the interest the Trust receives on the Debt Securities from time to
time, and (b) upon the occurrence of an Exchange Event, the proceeds from the
redemption of the Debt Securities. The redemption proceeds of the Debt
Securities distributed to holders of TrUEPrS upon the occurrence of an Exchange
Event will be (i) if the Exchange Event is anything other than a redemption or
Buy-Back of the ANZ Preference Shares for cash, ADRs evidencing, for each
TrUEPrS, one ADS and (ii) if the Exchange Event is a redemption or Buy-Back of
the ANZ Preference Shares for cash, US$25 per TrUEPrS plus an amount equal to
the accrued but unpaid interest on each US$25 principal amount of the Debt
Securities from and including the Interest Payment Date immediately preceding
the Exchange Date to but excluding such Exchange Date. See "Investment
Objective and Policies."
Except as described herein, holders of TrUEPrS will receive non-cumulative
dividend distributions in an amount equal to US$ per TrUEPrS per annum,
payable quarterly in arrears in an amount equal to US$ per TrUEPrS on each
Dividend Payment Date to holders of record on the immediately preceding Record
Date. The first distribution in respect of the period from and including the
Issue Date to but excluding October 15, 1998 will equal US$ per TrUEPrS. See
"Investment Objective and Policies--Trust Assets."
Dividend payments on the TrUEPrS will be made from the interest payments
received by the Trust on the Debt Securities. Interest payments on the Debt
Securities will be made by the U.K. Company to the extent that it receives
payments (the "Income Entitlements") as the income beneficiary of the
Distribution Trust. The U.K. Company's right to receive Income Entitlements
will not represent an absolute ownership interest in the Distribution Trust or
the income thereof, but rather an entitlement to receive Income Entitlements
only to the extent actually distributed to the U.K. Company by the Distribution
Trust; if any Income Entitlement payable on any Interest Payment Date is not
paid to the U.K. Company on such date for any reason, the Distribution Trust
will have no obligation to pay such Income Entitlement to the U.K. Company and
the U.K. Company will have no right to require such payment. In the event an
Income Entitlement is not paid to the U.K. Company for any reason, an Exchange
Event will occur because the U.K. Company will have insufficient funds to pay
interest due on the Debt Securities.
On and after an Exchange Date, the U.K. Company will cease to be the income
beneficiary of the Distribution Trust and an affiliate of ANZ will receive all
the Income Entitlements of the Distribution Trust
4
<PAGE>
thereafter; provided, however, if the Exchange Event is the cash redemption or
Buy-Back of the ANZ Preference Shares, the U.K. Company will be entitled to
receive an Income Entitlement equal to the accrued but unpaid interest on the
Debt Securities for the period from and including the Interest Payment Date
immediately preceding the Exchange Date to but excluding the Exchange Date.
Under the terms of the Distribution Trust, other than in connection with a
cash redemption or Buy-Back of ANZ Preference Shares, no Income Entitlement
shall be paid or payable to the U.K. Company on any Interest Payment Date if
(i) an Exchange Event has occurred on or prior to such Interest Payment Date,
(ii) the amount of Income Entitlement payable on such date, together with the
aggregate amount of dividends paid on or before such date during the then
current fiscal year of ANZ on any preference shares or ordinary shares of ANZ,
would exceed ANZ's earnings during the prior fiscal year or (iii) the payment
of such Income Entitlement would be prohibited or limited by applicable law,
regulation or order or by any instruments or agreements to which ANZ is subject
(collectively, the "Payment Prohibitions").
On each Interest Payment Date, (i) the ANZ Borrower will make an interest
payment on the ANZ Loan to the Distribution Trust; (ii) if no Payment
Prohibition exists, the Distribution Trust will distribute such interest
payment as an Income Entitlement to the U.K. Company; and (iii) the U.K.
Company will use the proceeds from any such distribution of an Income
Entitlement to pay (a) interest on the Debt Securities to the Trust, (b)
ongoing costs and expenses of the U.K. Company and the Jersey Subsidiary, (c)
quarterly dividend payments on the U.K. Company's voting shares to the Jersey
Holding Company (as defined herein), which dividends will be used by the Jersey
Holding Company to pay ongoing expenses of the Jersey Holding Company, the
Jersey Charitable Trust, the Collateral Agent and (pursuant to an expense
agreement (the "Trust Expense Agreement") between the Jersey Holding Company
and The Bank of New York, as the Administrator, Custodian and Paying Agent of
the Trust) the Trust, and (d) an indemnity fee payable to ANZMB Limited, an
affiliate of ANZ (the "ANZ Affiliate"). On each Interest Payment Date (which
will also be a Dividend Payment Date), The Bank of New York, as Administrator,
will use all the interest received by the Trust on the Debt Securities to pay
dividend distributions on the TrUEPrS.
TRUST ASSETS
The Trust's assets will consist of US$500,100,000 aggregate principal amount
of Debt Securities (US$575,000,000 aggregate principal amount of Debt
Securities if the Underwriters' over-allotment option is exercised in full),
and any distributions thereon.
EXCHANGE EVENT
The occurrence of any of the following events shall constitute an "Exchange
Event" as of the "Exchange Date" indicated below:
(i) the earlier of October 15, 2047 and the date of any earlier
redemption or Buy-Back of the ANZ Preference Shares for cash (see
"Investment Objective and Policies--Exchange Event"), in which case the
Exchange Date will be the earlier of such dates;
(ii) any date selected by ANZ in its absolute discretion, in which case
the Exchange Date will be such date;
(iii) the failure of the Trust to receive for any reason on or within
three Business Days after an Interest Payment Date the interest then due on
the Debt Securities in full without deduction or withholding for any taxes,
duties or other charges, in which case the Exchange Date will be the fourth
Business Day following such Interest Payment Date;
(iv) any date on which the Tier 1 Capital Ratio or the Total Capital
Adequacy Ratio of ANZ (either as reported quarterly by ANZ to the
Australian Prudential Regulation Authority ("APRA") or as determined
5
<PAGE>
at any time by APRA in its absolute discretion) is below 4% or 8%,
respectively or, in each case, such lesser percentage, as may be prescribed
by APRA for ANZ at the time (the applicable percentage in each such case
being the "Required Percentage"), and is not increased by ANZ to at least
4% or 8%, respectively or such lesser Required Percentage, within 90 days
after the date on which ANZ makes such quarterly report or receives notice
from APRA of such determination by APRA, as applicable, in which case the
Exchange Date will be the Business Day immediately following the expiration
of such 90-day period;
(v) any change in (A) the legal ownership of the securities (other than
the Debt Securities) issued by, (B) any provision of the constituent
documents of (unless such change has been consented to by the record
holders of more than 50% of the TrUEPrS or, in the opinion of competent
legal counsel selected by the Trust, such change would not have a material
adverse effect on the rights of the holders of the TrUEPrS), or (C) the
business purpose (or, solely with respect to the Jersey Charitable Trust,
the powers of the trustees thereof) (as specified in the constituent
documents) of, any of the U.K. Company, the Jersey Holding Company, the
Jersey Charitable Trust or the Jersey Subsidiary, in which case the
Exchange Date will be the date on which the change occurs;
(vi) any change in the business purpose (as specified in the constituent
documents) of the Distribution Trust, in which case the Exchange Date will
be the date on which the change occurs;
(vii) the common securities of the Distribution Trust cease to be wholly-
owned, directly or indirectly, by ANZ or a directly or indirectly wholly-
owned subsidiary or branch of ANZ, in which case the Exchange Date will be
the date on which the common securities of the Distribution Trust cease to
be wholly-owned, directly or indirectly, by ANZ or a wholly-owned
subsidiary or branch of ANZ;
(viii) the ANZ Borrower ceases to be ANZ or a directly or indirectly
wholly-owned subsidiary or branch of ANZ, in which case the Exchange Date
will be the date on which the ANZ Borrower ceases to be ANZ or a wholly-
owned subsidiary or branch of ANZ;
(ix) (A) a proceeding is commenced by ANZ, the U.K. Company, the Jersey
Holding Company, the Jersey Charitable Trust, the Jersey Subsidiary, the
Distribution Trust or the ANZ Borrower (each, a "Relevant Entity") or a
person that controls the Relevant Entity for an order that the Relevant
Entity be wound up or for the appointment of a provisional liquidator,
liquidator, administrator, controller or similar official in respect of the
Relevant Entity or all or substantially all of its property, in which case
the Exchange Date will be the date on which the proceeding is filed; (B) a
proceeding is commenced by any other person for an order that a Relevant
Entity be wound up or for the appointment of a provisional liquidator,
liquidator, administrator, controller or similar official in respect of a
Relevant Entity or all or substantially all of its property (unless such
proceeding is discontinued or dismissed within 21 days of its having been
filed), in which case the Exchange Date will be the Business Day
immediately following the expiration of such 21-day period; (C) a
provisional liquidator, liquidator, administrator, controller or similar
official is appointed whether by a court or otherwise in respect of any
Relevant Entity or all or substantially all of its property (unless such
appointment is revoked or set aside within 21 days of such appointment), in
which case the Exchange Date will be the Business Day immediately following
the expiration of such 21-day period; or (D) the Trust dissolves in
accordance with the terms of the Declaration of Trust (as defined herein)
or for any other reason, in which case the Exchange Date will be the
Business Day immediately preceding the effective date of such dissolution;
and
(x) the Collateral Agent fails, at any time, to have a valid first,
perfected and enforceable security interest in, and lien on, the Jersey
Preference Shares and the ADSs representing the ANZ Preference Shares, and
any redemption proceeds from any of the foregoing, and such failure is not
remedied on or before ten Business Days after written notice of such
failure is given to the U.K. Company or the Jersey Subsidiary, as the case
may be, by the Collateral Agent as contemplated by the Security and Pledge
Agreements, in which case the Exchange Date will be the Business Day
immediately following the expiration of such ten Business Day period.
6
<PAGE>
Notwithstanding the foregoing, the ANZ Borrower may, with the consent of the
Distribution Trust, assign the ANZ Loan or the Distribution Trust may replace
the ANZ Loan with another loan, in each case, to ANZ or to another directly or
indirectly wholly-owned subsidiary or branch office of ANZ with prospective
payment terms identical to, and other terms substantially the same as, those of
the ANZ Loan, in which case ANZ or such other subsidiary or branch office and
loan will be deemed to be the ANZ Borrower and the ANZ Loan, respectively, and
any such action will not constitute an Exchange Event.
Upon the occurrence of an Exchange Event, each holder of a TrUEPrS will be
entitled to receive, from the proceeds of the sequential redemption of the
Jersey Preference Shares and the Debt Securities, a distribution of either (i)
if the Exchange Event is anything other than a redemption or Buy-Back of the
ANZ Preference Shares for cash, one ADS per TrUEPrS or (ii) if the Exchange
Event is a redemption or Buy-Back of the ANZ Preference Shares for cash, US$25
per TrUEPrS plus an amount equal to the accrued but unpaid interest on US$25
principal amount of the Debt Securities from and including the Interest Payment
Date immediately preceding the Exchange Date to but excluding such Exchange
Date. In the case of any such distribution of ADSs, the holders of TrUEPrS
shall become the record holders of the ADSs as of the opening of business on
the Exchange Date, and ADRs evidencing such ADSs will be delivered to such
holders as soon as practicable on or after the Exchange Date.
Dividend distributions on the TrUEPrS will cease to accrue on and after the
Exchange Date. In the case of any Exchange Event other than a redemption or
Buy-Back of the ANZ Preference Shares for cash, no dividend distributions will
be payable on the TrUEPrS on the Exchange Date (even if such Exchange Date is a
Dividend Payment Date). Instead, non-cumulative dividends will begin to accrue
on the ANZ Preference Shares from and including the last Interest Payment Date
in respect of which interest on the Debt Securities has been paid or provided
for in full. Accordingly, the dividends for any quarterly dividend period
ending on or after the Exchange Date will be payable as dividends on the ANZ
Preference Shares and in accordance with the terms of the ANZ Preference
Shares.
TERM OF THE TRUST
The Trust will dissolve as soon as practicable after the exchange of the
TrUEPrS for ADSs or cash, as the case may be, upon the occurrence of an
Exchange Event. See "Investment Objective and Policies--Trust Dissolution" and
"Risk Factors--Limited Term."
CERTAIN TAX CONSIDERATIONS
United States
The Trust will be classified as a grantor trust for United States Federal
income tax purposes and the Debt Securities held by the Trust will be treated
as equity in ANZ. Accordingly, each holder will be treated for United States
Federal income tax purposes as owning equity of ANZ and will be required to
include in income, as dividends, the holder's pro rata share of the gross
amount of the interest paid on the Debt Securities to the extent of the current
and accumulated earnings and profits (as determined for United States Federal
income tax purposes) of ANZ.
A holder's exchange of TrUEPrS for ADSs upon the occurrence of an Exchange
Event generally will not constitute a taxable event for United States Federal
income tax purposes. However, the receipt of cash upon exchange of the TrUEPrS
in connection with the redemption or Buy-Back of the ANZ Preference Shares for
cash would constitute a taxable event for United States Federal income tax
purposes, and a holder of TrUEPrS generally would be required to recognize gain
or loss in respect of TrUEPrS exchanged for cash. See "Taxation--Certain United
States Federal Income Tax Considerations."
7
<PAGE>
Australia
The Trust would not be treated as a resident of Australia for Australian
income tax purposes. As it is not in receipt of Australian source income it
will not be subject to Australian tax on income earned. Therefore, quarterly
distributions by the Trust to non-Australian resident holders of TrUEPrS will
not be subject to Australian tax whether by withholding or otherwise.
There should be no Australian tax consequences to the Trust of the delivery
of the ADSs to holders of TrUEPrS upon the occurrence of an Exchange Event. The
sale of TrUEPrS or the ANZ Preference Shares represented by the ADSs may
generate assessable income to certain U.S. holders. The sale of TrUEPrS or ADSs
by a U.S. holder may be subject to Australian capital gains tax where a U.S.
holder is a non-Australian resident but the U.S. holder and the U.S. holder's
associates together beneficially hold or at any time during the five years
preceding such sale held shares or interests in shares representing 10% or more
in value of the issued capital of an Australian listed company, such as ANZ.
Subject to certain conditions, the terms of the ANZ Preference Shares provide
for holders to be grossed-up for Australian withholding tax on payments paid on
the ANZ Preference Shares being dividends or amounts deemed to be dividends for
Australian tax purposes. See "Taxation--Certain Australian Tax Considerations."
MANAGEMENT ARRANGEMENTS
The Trust will be internally managed and will not have an investment adviser.
The Trust's portfolio will consist only of US$500,100,000 aggregate principal
amount of Debt Securities (US$575,000,000 aggregate principal amount of Debt
Securities if the Underwriters' over-allotment option is exercised in full),
and any distributions thereon, and will not be actively managed. The activities
of the Trust will be limited so as to ensure that the Trust will qualify as a
grantor trust for United States Federal income tax purposes. The administration
of the Trust will be overseen by the trustees (the "Trustees") thereof. The
day-to-day administration of the Trust will be carried out by The Bank of New
York (or its successor), as the Administrator. The Bank of New York (or its
successor) will also act as custodian (the "Custodian") for the Trust's assets
and as paying agent, transfer agent and registrar (the "Paying Agent") with
respect to the TrUEPrS. Except as aforesaid, and except for The Bank of New
York's role as Collateral Agent under the Security and Pledge Agreements, as
paying and transfer agent for the Debt Securities and the ANZ Preference Shares
and as depositary for the ADRs, The Bank of New York will have no other
affiliation with, and will not be engaged in any other transaction with, the
Trust. For their services, the fees of the Administrator, the Custodian, the
Trustees and the Paying Agent will be paid by the Jersey Holding Company
pursuant to the Trust Expense Agreement. See "Management Arrangements."
RISK FACTORS
The Trust has adopted a fundamental policy that 100% of its portfolio be
invested in the Debt Securities, and the distributions thereon, and that the
Debt Securities may not be disposed of during the term of the Trust except upon
the occurrence of an Exchange Event. The Trust will not be managed like a
typical closed-end investment company.
The Trust is classified as a "non-diversified" investment company under the
Investment Company Act. Consequently, the Trust is not limited by the
Investment Company Act in the proportion of its assets that may be invested in
the securities of a single issuer. Since the only securities held by the Trust
will be the Debt Securities, the Trust may be subject to greater risk than
would be the case for an investment company with more diversified investments.
The TrUEPrS have no trading history and it is not possible to predict how
they will trade in the secondary market. The Underwriters currently intend, but
are not obligated, to make a market in the TrUEPrS. There can be no assurance
that a secondary market will develop or, if a secondary market does develop,
that it will provide the holders of the TrUEPrS with liquidity of investment or
that it will continue for the life of the TrUEPrS.
8
<PAGE>
The Trust is a newly organized closed-end investment company with no previous
operating history. Shares of closed-end investment companies frequently trade
at a discount from their net asset value, which is a risk separate and distinct
from the risk that the Trust's net asset value will decrease. The risk of loss
associated with this characteristic of closed-end investment companies may be
greater for investors expecting to sell shares of a closed-end investment
company soon after the completion of an initial public offering.
Except as described below, holders of the TrUEPrS will not be entitled to any
rights with respect to the ANZ Preference Shares (including, without
limitation, rights to receive any dividends or other distributions in respect
thereof) until such time, if any, as the Trust shall have delivered ADSs
representing the ANZ Preference Shares in exchange for TrUEPrS upon the
occurrence of an Exchange Event (which will not occur if the Exchange Event is
the redemption or Buy-Back of the ANZ Preference Shares for cash). Pursuant to
the ADRs Security and Pledge Agreement and the ADR deposit agreement, each
TrUEPrS will entitle the holder thereof to direct the exercise of the voting
rights attaching to four ANZ Preference Shares represented by one ADS. The
holders of the ANZ Preference Shares will be entitled to vote together with the
holders of ordinary shares of ANZ on the basis of one vote per ANZ Preference
Share on any poll (a) in all cases with respect to certain matters specified
herein and (b) during a Special Voting Period (as defined herein), with respect
to all matters on which the holders of the ordinary shares of ANZ are entitled
to vote. A "Special Voting Period" is the period from and including (i) any
Dividend Payment Date on which ANZ fails to pay in full the dividends accrued
in respect of the quarterly dividend period then ended or (ii) the fourth
Business Day after any Exchange Date occurring as a result of any failure by
the Trust to receive in full the interest payable on the Debt Securities
unless, prior to such date, ANZ has paid in full an optional dividend on the
ANZ Preference Shares in an aggregate amount equal to the amount of interest
not so received (an "Optional Dividend"), in each case to but excluding the
first Dividend Payment Date thereafter as of which ANZ has paid in full four
consecutive quarterly dividends on the ANZ Preference Shares. In addition, the
holders of the ANZ Preference Shares will have the right to vote separately as
a class in certain circumstances involving a variation of the rights of holders
of the ANZ Preference Shares. Pursuant to the ADRs Security and Pledge
Agreement, as long as the ADSs are owned by the Jersey Subsidiary, the Jersey
Subsidiary will, or will cause the Collateral Agent to, direct the ADR
depositary to vote the ANZ Preference Shares represented by the ADSs as
directed by the holders of TrUEPrS. See "Risk Factors."
LISTING
Application has been made to list the TrUEPrS on the NYSE.
9
<PAGE>
FEE TABLE
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load (as a percentage of offering price)......... 0%(a)
Automatic Dividend Reinvestment Plan Fees...................... Not Applicable
ANNUAL EXPENSES (as a percentage of net assets)
Management Fees(b)............................................. 0%
Other Expenses(c).............................................. 0%
--------------
Total Annual Expenses(c)..................................... 0%
==============
</TABLE>
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
EXAMPLE
An investor would pay the following expenses on a $1,000
investment, including the maximum sales load of $0 and assuming
(1) no annual expenses and (2) a 5% annual return throughout
the periods.................................................... $ 0 $ 0
</TABLE>
- --------
(a) There is no sales load because, in view of the fact that the proceeds of
the sale of the TrUEPrS will ultimately be invested in the ANZ Preference
Shares, ANZ has agreed to pay the Underwriters' compensation. See the cover
page of this Prospectus and "Underwriting."
(b) See "Management Arrangements." The Trust will be internally managed;
consequently there will be no separate investment advisory fee paid by the
Trust. The Bank of New York will act as the Administrator of the Trust.
(c) The organization costs of the Trust in the amount of $32,000 and the costs
associated with the initial registration and the Offering, estimated to be
approximately $628,000, will be paid by the Trust out of the facility fee
to be paid on the Issue Date to the Trust by the U.K. Company in connection
with the investment by the Trust in the Debt Securities. The ongoing
administrative and other expenses of the Trust will be paid by the Jersey
Holding Company pursuant to the Trust Expense Agreement. Any expenses of
the Trust not paid by the Trust's arrangements with the Jersey Holding
Company under the Trust Expense Agreement will be paid by the ANZ Affiliate
pursuant to an expense and indemnity agreement among it, the U.K. Company,
the Trust, the Jersey Holding Company, the Jersey Subsidiary and the Jersey
Charitable Trust. See "Management Arrangements--Estimated Expenses." Absent
such arrangements, the Trust's "Other Expenses" and "Total Annual Expenses"
are estimated to initially be $315,000 in the aggregate or 0.055% of the
Trust's net assets.
The foregoing Fee Table is intended to assist investors in understanding the
costs and expenses that a holder of TrUEPrS will bear directly or indirectly.
The Example set forth above utilizes a 5% annual rate of return as mandated by
Securities and Exchange Commission regulations. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSES OR ANNUAL RATES OF RETURN, AND
ACTUAL EXPENSES OR ANNUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE
ASSUMED FOR PURPOSES OF THE EXAMPLE.
10
<PAGE>
[a STRUCTURAL DIAGRAM of transaction parties, intervening vehicles
and payment obligations appears here on the printed material]
11
<PAGE>
THE TRUST
ANZ Exchangeable Preferred Trust (the "Trust") is a newly-created Delaware
business trust and will be registered as a closed-end management investment
company under the U.S. Investment Company Act of 1940, as amended (the
"Investment Company Act"). The Trust was formed on July 6, 1998 pursuant to a
Certificate of Trust as filed with the Secretary of State of the State of
Delaware on July 8, 1998 and as restated and filed on September 1, 1998 and a
Trust Agreement dated as of such date, which was amended and restated (as
amended and restated, the "Declaration of Trust"). The term of the Trust will
expire as soon as possible after the exchange of the TrUEPrS for ADSs or cash,
as the case may be, upon the occurrence of an Exchange Event. The Trust will
be treated as a grantor trust for United States Federal income tax purposes.
The Trust's principal office is located at 850 Library Avenue, Suite 204,
Newark, Delaware 19715, and its telephone number is (302) 738-6680.
USE OF PROCEEDS AND COLLATERAL ARRANGEMENTS
The proceeds of the Offering (without giving effect to the expenses of the
Offering payable by the Trust) and the 4,000 TrUEPrS (the "Initial TrUEPrS")
issued by the Trust to ML IBK Positions, Inc. will be $500,100,000 (or
$575,000,000 if the Underwriters' over-allotment option is exercised in full).
On the Issue Date (as defined herein), the proceeds of the Offering and the
proceeds from the sale of the Initial TrUEPrS will be used to purchase
US$500,100,000 aggregate principal amount (or US$575,000,000 aggregate
principal amount if the Underwriters' over-allotment option is exercised in
full) of % Mandatorily Redeemable Debt Securities due 2047 (the "Debt
Securities") from Carlotta (UK) Company, a special purpose unlimited company
incorporated under the laws of, and domiciled in, the United Kingdom (the
"U.K. Company"). The Trust, as the holder of the Debt Securities, will be
entitled to receive interest thereon at the rate per annum of %, payable
quarterly in arrears on each Dividend Payment Date (each, an "Interest Payment
Date"). The Debt Securities will be listed on the Luxembourg Stock Exchange
and, unless redeemed on an earlier Exchange Date (as defined herein), will be
redeemed on October 15, 2047. The Debt Securities will be issued only in
bearer form and will be denominated and pay interest in U.S. dollars.
The following transactions will take place on the Issue Date. Reference is
made to page 11 for a diagram of the transactions.
The U.K. Company will use the proceeds from the sale of the Debt Securities
to purchase at a price equal to their liquidation preference fully paid, non-
dividend paying preference shares, liquidation preference US$25 per share (the
"Jersey Preference Shares"), issued by Carlotta (Investments) Limited, a
company incorporated with limited liability under the laws of, and domiciled
in, Jersey, the Channel Islands (the "Jersey Subsidiary"). The Jersey
Subsidiary will use the proceeds from the sale of the Jersey Preference Shares
to make a payment to Australia and New Zealand Banking Group Limited ("ANZ")
in consideration for the issuance by the ADR (as defined herein) depositary to
the Jersey Subsidiary of American Depositary Shares ("ADSs"), each
representing four fully paid non-cumulative preference shares, liquidation
preference US$6.25 per share (the "ANZ Preference Shares"), of ANZ, at a price
per ADS equal to US$25 (i.e., the aggregate liquidation preference of the four
ANZ Preference Shares represented thereby). No dividends will accrue or be
paid on the ANZ Preference Shares represented by the ADSs unless an Exchange
Event (other than a redemption or Buy-Back of the ANZ Preference Shares)
occurs. On and after such an Exchange Date, non-cumulative dividends will be
payable, if and when declared by the board of directors of ANZ out of profits
legally available therefor, in U.S. dollars in an amount equal to US$ per
ANZ Preference Share per annum, payable quarterly in arrears in an amount
equal to US$ per ANZ Preference Share on each Dividend Payment Date (as
defined herein) to holders of record as of the immediately preceding Record
Date (as defined herein).
ANZ will use the proceeds from the issue of the ANZ Preference Shares to
make a capital contribution to a business trust established under the laws of
the State of Delaware (the "Distribution Trust"). The Distribution Trust will
use ANZ's capital contribution to make a loan (the "ANZ Loan") to ANZ or a
wholly-owned subsidiary or branch of ANZ (the "ANZ Borrower").
12
<PAGE>
The American Depositary Receipts ("ADRs") evidencing the ADSs will be
deposited with The Bank of New York, as the collateral agent (the "Collateral
Agent"), pursuant to a security and pledge agreement (the "ADRs Security and
Pledge Agreement") to be entered into among the Trust, the U.K. Company, the
Jersey Subsidiary and the Collateral Agent. Pursuant to the terms of the ADRs
Security and Pledge Agreement, the Jersey Subsidiary will irrevocably and
unconditionally deposit the ADRs evidencing the ADSs with the Collateral Agent
and (i) the Jersey Subsidiary will irrevocably and unconditionally pledge its
interest in the ADRs to secure its redemption obligations to the U.K. Company
under the Jersey Preference Shares, (ii) the U.K. Company, with the consent of
the Jersey Subsidiary, will irrevocably and unconditionally assign and
hypothecate to the Trust such pledge to secure its redemption obligations
under the Debt Securities and (iii) the Jersey Subsidiary and the U.K. Company
will irrevocably and unconditionally direct the Collateral Agent, upon the
occurrence of an Exchange Event (other than a redemption or Buy-Back of the
ANZ Preference Shares), to transfer the ADRs to the Trust. Pursuant to a
separate security and pledge agreement (the "Jersey Preference Shares Security
and Pledge Agreement" and, together with the ADRs Security and Pledge
Agreement, the "Security and Pledge Agreements") to be entered into among the
Trust, the U.K. Company and the Collateral Agent, the U.K. Company will
irrevocably and unconditionally deposit the Jersey Preference Shares with the
Collateral Agent and pledge the Jersey Preference Shares to secure its
redemption obligations to the Trust under the Debt Securities. Prior to the
occurrence of an Exchange Event, ownership of the Jersey Preference Shares and
the ADSs will remain with the U.K. Company and the Jersey Subsidiary,
respectively, although pursuant to the ADRs Security and Pledge Agreement, the
Jersey Subsidiary will agree to, or will cause the Collateral Agent to, direct
the ADR depositary to vote the ANZ Preference Shares represented by the ADSs
as directed by the holders of the TrUEPrS. Each TrUEPrS will entitle the
holder to direct the exercise of the voting rights attaching one ADS and the
four ANZ Preference Shares represented thereby.
The Debt Securities will be held by the Custodian for the Trust.
INVESTMENT OBJECTIVE AND POLICIES
GENERAL
The Trust will invest the proceeds of the Offering in the Debt Securities
issued by the U.K. Company. The Trust's investment objective is to distribute
to the holders of TrUEPrS (a) prior to an Exchange Event, pro rata based on
the number of TrUEPrS outstanding the interest the Trust receives on the Debt
Securities from time to time, and (b) upon the occurrence of an Exchange
Event, the proceeds of the redemption of the Debt Securities. The redemption
proceeds of the Debt Securities distributed to holders of TrUEPrS upon the
occurrence of an Exchange Event will be (i) if the Exchange Event is anything
other than a redemption or mandatory repurchase ("Buy-Back") of the ANZ
Preference Shares for cash, American Depositary Receipts ("ADRs") evidencing,
for each TrUEPrS, one ADS representing four ANZ Preference Shares, and (ii) if
the Exchange Event is a redemption or Buy-Back of the ANZ Preference Shares
for cash, US$25 per TrUEPrS plus an amount equal to the accrued but unpaid
interest on each US$25 principal amount of the Debt Securities from and
including the Interest Payment Date immediately preceding the Exchange Date to
but excluding such Exchange Date. The ANZ Preference Shares will accrue non-
cumulative dividends at the rate of US$ per share per annum, payable
quarterly in arrears in an amount equal to US$ per share on each Dividend
Payment Date to holders of record as of the immediately preceding Record Date.
Upon the occurrence of an Exchange Event, the Administrator will notify The
Depository Trust Company (the "Depository") and publish a notice in The Wall
Street Journal or another daily newspaper of national circulation stating
whether ADSs or cash will be delivered in exchange for the TrUEPrS.
The Trust has adopted a fundamental policy as required by the Declaration of
Trust to invest 100% of its portfolio in the Debt Securities, and any
distributions thereon, and not to dispose of the Debt Securities during the
term of the Trust except upon the occurrence of an Exchange Event. The
foregoing fundamental policy of the Trust may not be changed without the vote
of 100% of the holders of the TrUEPrS.
13
<PAGE>
TRUST ASSETS
The Trust's assets will consist of US$500,100,000 aggregate principal amount
of Debt Securities (US$575,000,000 aggregate principal amount of Debt
Securities if the Underwriters' over-allotment option is exercised in full),
and any distributions thereon. Except as described herein, holders of the
TrUEPrS will receive non-cumulative dividend distributions in an amount equal
to US$ per TrUEPrS per annum, payable quarterly in arrears in an amount
equal to US$ per TrUEPrS on each January 15, April 15, July 15, and October
15 of each year (each, a "Dividend Payment Date"), to holders of record as of
the immediately preceding January 1, April 1, July 1 and October 1 (each, a
"Record Date"), respectively. The first distribution in respect of the period
from and including the original issue date (the "Issue Date") to but excluding
October 15, 1998 will equal US$ per TrUEPrS. See "Dividends and
Distributions."
In the event that any Dividend Payment Date for the TrUEPrS or Interest
Payment Date for the Debt Securities is not a Business Day, then the dividend
or interest payable on such date need not be made on such Dividend Payment
Date or Interest Payment Date, as applicable, but instead may be made on the
next succeeding Business Day with the same force and effect as if made on such
Dividend Payment Date or Interest Payment Date, as the case may be. As used
herein, "Business Day" means each Monday, Tuesday, Wednesday, Thursday or
Friday which is not a day on which banking institutions in Sydney, Australia,
New York, New York or the city which is the principal place of business of the
ANZ Borrower from time to time (initially Wellington, New Zealand) are
authorized or obliged by law or executive order to close.
ANZ
THIS PROSPECTUS RELATES ONLY TO THE TrUEPrS OFFERED HEREBY AND DOES NOT
RELATE TO ANZ, THE ADSs OR THE ANZ PREFERENCE SHARES. ANZ HAS FILED A
REGISTRATION STATEMENT ON FORM F-3 WITH THE SECURITIES AND EXCHANGE COMMISSION
(THE "COMMISSION") WITH RESPECT TO THE ANZ PREFERENCE SHARES AND A
REGISTRATION STATEMENT ON FORM F-6 WITH RESPECT TO THE ADSs THAT MAY BE
RECEIVED BY A HOLDER OF TrUEPrS UPON THE OCCURRENCE OF AN EXCHANGE EVENT. THE
PROSPECTUS OF ANZ CONSTITUTING A PART OF SUCH REGISTRATION STATEMENT ON FORM
F-3 INCLUDES INFORMATION RELATING TO ANZ, THE ADSs AND THE ANZ PREFERENCE
SHARES. THE PROSPECTUS OF ANZ IS BEING ATTACHED HERETO AND DELIVERED TO
PROSPECTIVE PURCHASERS OF TrUEPrS TOGETHER WITH THIS PROSPECTUS FOR
CONVENIENCE OF REFERENCE ONLY. THE PROSPECTUS OF ANZ DOES NOT CONSTITUTE A
PART OF THIS PROSPECTUS, NOR IS IT INCORPORATED BY REFERENCE HEREIN.
EXCHANGE EVENT
The occurrence of any of the following events shall constitute an "Exchange
Event" as of the "Exchange Date" indicated below:
(i) the earlier of October 15, 2047 and the date of any earlier
redemption or Buy-Back of the ANZ Preference Shares for cash, in which case
the Exchange Date will be the earlier of such dates;
(ii) any date selected by ANZ in its absolute discretion, in which case
the Exchange Date will be such date;
(iii) the failure of the Trust to receive for any reason on or within
three Business Days after an Interest Payment Date the interest then due on
the Debt Securities in full without deduction or withholding for any taxes,
duties or other charges, in which case the Exchange Date will be the fourth
Business Day following such Interest Payment Date;
(iv) any date on which the Tier 1 Capital Ratio or the Total Capital
Adequacy Ratio of ANZ (either as reported quarterly by ANZ to the
Australian Prudential Regulation Authority ("APRA") or as determined at any
time by APRA in its absolute discretion) is below 4% or 8%, respectively
or, in each case, such lesser percentage, as may be prescribed by APRA for
ANZ at the time (the applicable percentage in each
14
<PAGE>
such case being the "Required Percentage"), and is not increased by ANZ to
at least 4% or 8%, respectively, or such lesser Required Percentage, within
90 days after the date on which ANZ makes such quarterly report or receives
notice from APRA of such determination by APRA, as applicable, in which
case the Exchange Date will be the Business Day immediately following the
expiration of such 90-day period;
(v) any change in (A) the legal ownership of the securities (other than
the Debt Securities) issued by, (B) any provision of the constituent
documents of (unless such change has been consented to by the record
holders of more than 50% of the TrUEPrS or, in the opinion of competent
legal counsel selected by the Trust, such change would not have a material
adverse effect on the rights of the holders of the TrUEPrS), or (C) the
business purpose (or, solely with respect to the Jersey Charitable Trust,
the powers of the trustees thereof) (as specified in the constituent
documents) of, any of the U.K. Company, the Jersey Holding Company, the
Jersey Charitable Trust or the Jersey Subsidiary, in which case the
Exchange Date will be the date on which the change occurs;
(vi) any change in the business purpose (as specified in the constituent
documents) of the Distribution Trust, in which case the Exchange Date will
be the date on which the change occurs;
(vii) the common securities of the Distribution Trust cease to be wholly-
owned, directly or indirectly, by ANZ or a directly or indirectly wholly-
owned subsidiary or branch of ANZ, in which case the Exchange Date will be
the date on which the common securities of the Distribution Trust cease to
be wholly-owned, directly or indirectly, by ANZ or a wholly-owned
subsidiary or branch of ANZ;
(viii) the ANZ Borrower ceases to be ANZ or a directly or indirectly
wholly-owned subsidiary or branch of ANZ, in which case the Exchange Date
will be the date on which the ANZ Borrower ceases to be ANZ or a wholly-
owned subsidiary or branch of ANZ;
(ix) (A) a proceeding is commenced by ANZ, the U.K. Company, the Jersey
Holding Company, the Jersey Charitable Trust, the Jersey Subsidiary, the
Distribution Trust or the ANZ Borrower (each, a "Relevant Entity") or a
person that controls the Relevant Entity for an order that the Relevant
Entity be wound up or for the appointment of a provisional liquidator,
liquidator, administrator, controller or similar official in respect of the
Relevant Entity or all or substantially all of its property, in which case
the Exchange Date will be the date on which the proceeding is filed; (B) a
proceeding is commenced by any other person for an order that a Relevant
Entity be wound up or for the appointment of a provisional liquidator,
liquidator, administrator, controller or similar official in respect of a
Relevant Entity or all or substantially all of its property (unless such
proceeding is discontinued or dismissed within 21 days of its having been
filed), in which case the Exchange Date will be the Business Day
immediately following the expiration of such 21-day period; (C) a
provisional liquidator, liquidator, administrator, controller or similar
official is appointed whether by a court or otherwise in respect of any
Relevant Entity or all or substantially all of its property (unless such
appointment is revoked or set aside within 21 days of such appointment), in
which case the Exchange Date will be the Business Day immediately following
the expiration of such21-day period; or (D) the Trust dissolves in
accordance with the terms of the Declaration of Trust or for any other
reason, in which case the Exchange Date will be the Business Day
immediately preceding the effective date of such dissolution; and
(x) the Collateral Agent fails, at any time, to have a valid first,
perfected and enforceable security interest in, and lien on, the Jersey
Preference Shares and the ADSs representing the ANZ Preference Shares, and
any redemption proceeds from any of the foregoing, and such failure is not
remedied on or before ten Business Days after written notice of such
failure is given to the U.K. Company or the Jersey Subsidiary, as the case
may be, by the Collateral Agent as contemplated by the Security and Pledge
Agreements, in which case the Exchange Date will be the Business Day
immediately following the expiration of such ten Business Day period.
Notwithstanding the foregoing, the ANZ Borrower may, with the consent of the
Distribution Trust, assign the ANZ Loan or the Distribution Trust may replace
the ANZ Loan with another loan, in each case, to ANZ or
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to another directly or indirectly wholly-owned subsidiary or branch office of
ANZ with prospective payment terms identical to, and other terms substantially
the same as, those of the ANZ Loan, in which case ANZ or such other subsidiary
or branch office and loan will be deemed to be the ANZ Borrower and the ANZ
Loan, respectively, and any such action will not constitute an Exchange Event.
Total Capital Adequacy Ratio means the total capital adequacy ratio as
prescribed by APRA in its capital adequacy guidelines for Australian banks, as
modified from time to time. Tier 1 Capital Ratio means the ratio of Tier 1
capital to risk weighted assets (on a consolidated group basis) prescribed by
APRA in its capital adequacy guidelines for Australian banks, as modified from
time to time. Tier 1 capital means capital which is regarded as "tier 1
capital" for the purposes of the capital adequacy guidelines of APRA.
The redemption or Buy-Back component of the Exchange Event set forth in
clause (i) above is a result of the terms of the ANZ Preference Shares, which
provide that, with the prior consent of APRA (if required) or in the case of a
Buy-Back, if no consent is required, with the confirmation that APRA has no
objection, and in accordance with the terms of issue of the ANZ Preference
Shares, ANZ may, in its absolute discretion, redeem or Buy-Back the ANZ
Preference Shares for cash (a) prior to the fifth anniversary of the Issue
Date, in whole, but only upon the occurrence of certain tax, regulatory or
registration events and (b) at any time on or after the fifth anniversary of
the Issue Date, in whole or, after an Exchange Date, in whole or in part.
If the Exchange Event is anything other than a redemption or Buy-Back of the
ANZ Preference Shares for cash, then each Jersey Preference Share and Debt
Security will be redeemed, automatically and sequentially, for one ADS. If a
redemption or Buy-Back of the ANZ Preference Shares for cash occurs, then the
Jersey Preference Shares and Debt Securities will be redeemed automatically
and sequentially, for cash. After any such redemption of the Debt Securities,
the Collateral Agent will deliver the ADSs or the cash for which the Debt
Securities are redeemed, as the case may be, to the Administrator and the
Administrator, on behalf of the Trust, will (i) in the case of a redemption or
Buy-Back of the ANZ Preference Shares for cash, distribute the proceeds to the
holders of TrUEPrS at the rate of US$25 per TrUEPrS then outstanding together
with an amount equal to the accrued ut unpaid interest on each US$25 principal
amount of Debt Securities from and including the Interest Payment Date
immediately preceding the Exchange Date to but excluding the Exchange Date, or
(ii) in all other cases, distribute the proceeds to the holders of TrUEPrS at
the rate of one ADS per TrUEPrS then outstanding. The distribution described
in the preceding sentence will be made to holders of record as of the opening
of business on the Exchange Date. The holders of the TrUEPrS will thereafter
have no further claims against the Trust and the Administrator will wind up
the Trust.
Dividend distributions on the TrUEPrS will cease to accrue on and after the
Exchange Date. In the case of any Exchange Event other than a redemption or
Buy-Back of the ANZ Preference Shares for cash, no dividend distributions will
be payable on the TrUEPrS on the Exchange Date (even if such Exchange Date is
a Dividend Payment Date). Instead, non-cumulative dividends will begin to
accrue on the ANZ Preference Shares from and including the last Interest
Payment Date in respect of which interest on the Debt Securities has been paid
or provided for in full. Accordingly, the dividends for any quarterly dividend
period ending on or after the Exchange Date will be payable as dividends on
the ANZ Preference Shares and in accordance with the terms of the ANZ
Preference Shares.
INTERVENING VEHICLES
The U.K. Company. The U.K. Company is a special purpose unlimited company
incorporated under the laws of, and domiciled in, the United Kingdom. The U.K.
Company is wholly-owned by a special purpose company incorporated with limited
liability under the laws of, and domiciled in, Jersey, the Channel Islands
(the "Jersey Holding Company"), which holds all of the U.K. Company's ordinary
shares. These ordinary shares will be the only capital stock of the U.K.
Company. The ordinary shares of the Jersey Holding Company will be the only
capital stock of the Jersey Holding Company and are held by a charitable trust
established under the laws of, and domiciled in, Jersey, the Channel Islands
(the "Jersey Charitable Trust").
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The U.K. Company was established for the purpose of, among other things,
owning all of the ordinary shares of the Jersey Subsidiary, issuing the Debt
Securities to the Trust and investing the proceeds thereof in the Jersey
Preference Shares. The U.K. Company will elect to be treated as a partnership
for United States Federal income tax purposes under U.S. Treasury Regulations
Sections 301.7701-1 through -3.
The U.K. Company will have at least two directors and an independent
auditor. The Memorandum and Articles of Association of the U.K. Company will
prohibit it from taking any action that would have a material adverse effect
on the rights of the holders of the TrUEPrS. There will be no annual
shareholder meetings. There will be one directors' meeting each year at which
the director(s) will nominate directors, if necessary, and approve the annual
accounts. The U.K. Company will also appoint a paying agent located in The
City of New York to receive Income Entitlements from the Distribution Trust,
to make payments on the Debt Securities to the Trust and to meet the ongoing
costs and expenses of various entities as described below.
The Jersey Subsidiary. The Jersey Subsidiary is a special purpose company
incorporated with limited liability under the laws of, and domiciled in,
Jersey, Channel Islands. The U.K. Company will own all the ordinary shares of
the Jersey Subsidiary. The Jersey Subsidiary was established for the purpose
of, among other things, issuing the Jersey Preference Shares to the U.K.
Company and investing the proceeds thereof in the ADSs. The Jersey Subsidiary
will elect to be disregarded as an entity that is separate from its owner
(i.e., the U.K. Company) for United States Federal income tax purposes under
U.S. Treasury Regulations Sections 301.7701-1 through -3.
The Jersey Subsidiary will be managed by a Board of Directors and have an
independent auditor. The Memorandum and the Articles of Association of the
Jersey Subsidiary will prohibit the Board of Directors from taking any action
that would have a material adverse effect on the rights of the holders of the
TrUEPrS. There will be no annual shareholder meetings. There will be one
directors' meeting each year at which the director(s) will nominate directors,
if necessary, and approve the annual accounts.
The Distribution Trust. The Distribution Trust is a business trust
established under the laws of the State of Delaware. The Distribution Trust
will operate in accordance with the distribution trust agreement that
establishes its terms; the U.K. Company will have no right to cause any
variation of such terms. The Distribution Trust will elect to be disregarded
as an entity that is separate from its owner (i.e., the holder of the common
securities of the Distribution Trust) for United States Federal income tax
purposes under U.S. Treasury Regulations Sections 301.7701-1 through -3.
The administration of the Distribution Trust will be overseen by the
trustees thereof.
On the Issue Date, ANZ will use the proceeds from the issuance of the ANZ
Preference Shares to make a capital contribution of US$500,100,000 (or
US$575,000,000 if the Underwriters exercise their over-allotment option in
full) to the Distribution Trust and the Distribution Trust will use the
capital contribution to make the ANZ Loan to the ANZ Borrower. The ANZ Loan
will mature five years after the maturity date of the Debt Securities on
October 15, 2052. The ANZ Loan will be the only asset, and interest thereon
will be the only source of revenue, of the Distribution Trust. Interest on the
ANZ Loan will accrue from the Issue Date and be due and payable on each
Interest Payment Date at the rate of % per annum. The interest paid on the
ANZ Loan will be used by the Distribution Trust to pay the Income Entitlements
to the U.K. Company. The interest rate represents the sum of % (the interest
rate on the Debt Securities, which equals the dividend rate on the TrUEPrS)
and a spread of 0.25%. The spread is designed to enable the U.K. Company to
pay (a) its ongoing costs and expenses and those of the Jersey Subsidiary, (b)
dividends to the Jersey Holding Company in an amount sufficient to enable it
to pay its expenses and those of the Jersey Charitable Trust, the Collateral
Agent and (pursuant to the Trust Expense Agreement (as defined herein)) the
Trust and (c) the indemnity fee payable to ANZMB Limited, an affiliate of ANZ
(the "ANZ Affiliate").
On and after an Exchange Date, the U.K. Company will cease to be an income
beneficiary of the Distribution Trust and ANZ Funds Pty Ltd, an affiliate of
ANZ, will receive all the Income Entitlements of the
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Distribution Trust thereafter; provided, however, if the Exchange Event is the
cash redemption or Buy-Back of the ANZ Preference Shares, the U.K. Company will
be entitled to receive an Income Entitlement equal to the accrued but unpaid
interest on the Debt Securities for the period from and including the Interest
Payment Date immediately preceding the Exchange Date to but excluding the
Exchange Date. In the event an Income Entitlement is not paid for any reason,
an Exchange Event will occur because the U.K. Company will have insufficient
funds to pay interest on the Debt Securities.
Under the terms of the Distribution Trust, other than in connection with a
cash redemption or Buy-Back of ANZ Preference Shares, no Income Entitlement
shall be paid or payable to the U.K. Company on any Interest Payment Date if
(i) an Exchange Event has occurred on or prior to such Interest Payment Date,
(ii) the amount of Income Entitlement payable on such date, together with the
aggregate amount of dividends paid on or before such date during the then
current fiscal year of ANZ on any preference shares or ordinary shares of ANZ,
would exceed ANZ's earnings during the prior fiscal year or (iii) the payment
of such Income Entitlement would be prohibited or limited by applicable law,
regulation or order or by any instruments or agreements to which ANZ is subject
(collectively, the "Payment Prohibitions"). In the event a Payment Prohibition
exists or will exist on any Interest Payment Date, ANZ will notify the
Administrator no later than the third Business Day prior to such date.
TRUST DISSOLUTION
The Trust will dissolve as soon as possible after the exchange of the TrUEPrS
for ADSs or cash, as the case may be, upon the occurrence of an Exchange Event.
INVESTMENT RESTRICTIONS
The Trust has adopted a fundamental policy that the Trust may not purchase
any securities or instruments other than the Debt Securities; issue any
securities or instruments except for the TrUEPrS; make short sales or purchase
securities on margin; write put or call options; borrow money; underwrite
securities; purchase or sell real estate, commodities or commodities contracts;
or make loans. The Trust has adopted a fundamental policy that 100% of its
portfolio be invested in Debt Securities and any distributions thereon, and not
to dispose of the Debt Securities during the term of the Trust, except upon the
occurrence of an Exchange Event.
Because of the foregoing limitations, the Trust's investments will be
concentrated initially in the financial services industry, which is the
industry in which ANZ currently operates. However, to the extent that in the
future ANZ diversifies its operations into one or more other industries, the
Trust's investments will be less concentrated in the financial services
industry.
RISK FACTORS
NO ACTIVE PORTFOLIO MANAGEMENT
It is a fundamental policy of the Trust that 100% of its portfolio be
invested in the Debt Securities and any distributions thereon, and not to
dispose of the Debt Securities during the term of the Trust, except upon the
occurrence of an Exchange Event. The Trust will not be managed like a typical
closed-end investment company.
ABSENCE OF TRADING HISTORY; MARKETABILITY; POSSIBILITY OF THE TRUEPRS TRADING
AT A DISCOUNT FROM NET ASSET VALUE
The TrUEPrS have no trading history and it is not possible to predict how
they will trade in the secondary market. The trading price of the TrUEPrS may
vary considerably prior to an Exchange Event due to, among other things,
complex and interrelated political, economic, financial and other factors that
can affect the capital markets generally, the stock exchanges or quotation
systems on which ANZ's shares are traded and the market segment of which ANZ is
a part and fluctuations in interest rates and rates of exchange between the
Australian dollar and the U.S. dollar and other factors that are difficult to
predict and beyond the Trust's control. Reference is made to the accompanying
prospectus of ANZ.
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The TrUEPrS are a new issue of securities and, accordingly, have no
established trading market. The Underwriters currently intend, but are not
obligated, to make a market in the TrUEPrS. There can be no assurance that a
secondary market will develop or, if a secondary market does develop, that it
will provide the holders of the TrUEPrS with liquidity of investment or that it
will continue for the life of the TrUEPrS. Application has been made to list
the TrUEPrS on the NYSE. There can be no assurance that such application will
be accepted or that, if accepted, the TrUEPrS will not later be delisted or
that trading in the TrUEPrS on the NYSE will not be suspended. In the event of
a delisting or suspension of trading on such exchange, the Trust will apply for
listing of the TrUEPrS on another national securities exchange or for quotation
on another trading market. If the TrUEPrS are not listed or traded on any
securities exchange or trading market, or if trading of the TrUEPr S is
suspended, pricing information for the TrUEPrS may be more difficult to obtain,
and the price and liquidity of the TrUEPrS may be adversely affected.
The Trust is a newly organized closed-end investment company with no previous
operating history. Shares of closed-end investment companies frequently trade
at a discount from their net asset value, which is a risk separate and distinct
from the risk that the Trust's net asset value will decrease. The Trust cannot
predict whether the TrUEPrS will trade at, below or above their net asset
value. The risk of purchasing investments that might trade at a discount is
more pronounced for investors who wish to sell their investments in a
relatively short period of time after completion of the Trust's initial public
offering because for those investors realization of a gain or loss on their
investments is likely to be more dependent upon the existence of a premium or
discount than upon portfolio performance. TrUEPrS are not subject to
redemption.
LIMITED TERM
The term of the Trust will expire as soon as possible after the exchange of
the TrUEPrS for ADSs or cash, as the case may be, upon the occurrence of an
Exchange Event.
NON-DIVERSIFIED PORTFOLIO
The Trust's assets will consist entirely of the Debt Securities and
distributions thereon. As a result, investments in the Trust may be subject to
greater risk than would be the case for a company with a more diversified
portfolio of investments.
LIMITED STOCKHOLDER RIGHTS
Except as described below, holders of the TrUEPrS will not be entitled to any
rights with respect to the ADSs or the ANZ Preference Shares (including,
without limitation, rights to receive any dividends or other distributions in
respect thereof) until such time, if any, as the Trust shall have delivered the
ADSs in exchange for TrUEPrS upon the occurrence of an Exchange Event (unless
the Exchange Event is the redemption or Buy-Back of the ANZ Preference Shares
for cash). In addition, the Trust as the holder of the Debt Securities, has no
voting rights in relation to the U.K. Company.
Each TrUEPrS will entitle the holder thereof to direct the exercise of the
voting rights attaching to four ANZ Preference Shares represented by one ADS.
The holders of the ANZ Preference Shares will be entitled to vote together with
the holders of ordinary shares of ANZ, on the basis of one vote per ANZ
Preference Share on any poll, (a) in all cases, with respect to certain matters
specified herein and (b) during a Special Voting Period (as defined below),
with respect to all matters on which the holders of the ordinary shares of ANZ
are entitled to vote. A "Special Voting Period" is the period from and
including (i) any Dividend Payment Date on which ANZ fails to pay in full the
dividends accrued in respect of the quarterly dividend period then ended or
(ii) the fourth Business Day after any Exchange Date occurring as a result of
any failure by the Trust to receive in full the interest payable on the Debt
Securities, unless, prior to such date, ANZ has paid in full an optional
dividend on the ANZ Preference Shares in an aggregate amount equal to the
amount of interest not so received (an "Optional Dividend"), in each case to
but excluding the first Dividend Payment Date thereafter as of which ANZ has
paid in full four consecutive quarterly dividends on the ANZ Preference Shares.
In addition, the holders
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of the ANZ Preference Shares will have the right to vote separately as a class
in certain circumstances involving a variation of the rights of holders of the
ANZ Preference Shares. As long as the ADSs are owned by the Jersey Subsidiary,
the Jersey Subsidiary will, or will cause the Collateral Agent to, direct the
ADR depositary to vote the ANZ Preference Shares represented by the ADSs as
directed by the holders of the TrUEPrS.
YEAR 2000 NONCOMPLIANCE
Many computer systems were designed using only two digits to designate years.
These systems may not be able to distinguish the Year 2000 from the Year 1900
(commonly known as the "Year 2000 Problem"). Like other investment companies
and financial and business organizations, the Trust could be adversely affected
if the computer systems used by the Trust's service providers do not properly
address this problem prior to January 1, 2000. The Trust has sought assurances
from its service providers that they are taking all necessary steps to ensure
that their computer systems will accurately reflect the Year 2000, and the
Trust will continue to monitor the situation. At this time, however, no
assurance can be given that the Trust's service providers have anticipated
every step necessary to avoid any adverse effect on the Trust attributable to
the Year 2000 Problem.
DESCRIPTION OF THE TRUEPRS
Each TrUEPrS represents a proportionate share of beneficial interest in the
Trust, and a total of 20,004,000 TrUEPrS will be issued in the Offering,
assuming no exercise of the Underwriters' over-allotment option. Upon
liquidation of the Trust, holders of TrUEPrS are entitled to share pro rata
based on the number of TrUEPrS outstanding in the net assets of the Trust
available for distribution. Holders of TrUEPrS have no preemptive, redemption
or conversion rights. The TrUEPrS, when issued and outstanding, will be fully
paid and nonassessable.
VOTING RIGHTS
Holders are entitled to one vote for each TrUEPrS on all matters to be voted
on by holders and are not able to cumulate their votes in the election of
Trustees. The Trust intends to hold annual meetings as required by the rules of
the NYSE. The holders have the right, upon the declaration in writing or vote
of more than two-thirds of the outstanding TrUEPrS, to remove a Trustee. The
Trustees will call a meeting of holders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of the TrUEPrS or to vote
on other matters upon the written request of the record holders of more than
50% of the TrUEPrS (unless substantially the same matter was voted on during
the preceding 12 months).
Pursuant to the ADRs Security and Pledge Agreement and the ADR deposit
agreement, each TrUEPrS will entitle the holder thereof to direct the exercise
of the voting rights attaching to one ADS and four ANZ Preference Shares. The
holders of the ANZ Preference Shares will be entitled to vote together with the
holders of ordinary shares of ANZ, on the basis of one vote per ANZ Preference
Share on any poll, (a) in all cases, with respect to certain matters specified
below and (b) during a Special Voting Period, with respect to all matters on
which the holders of the ordinary shares of ANZ are entitled to vote. The
matters referred to in clause (a) of the preceding sentence upon which the
holders of ANZ Preference Shares will have a right to vote, together with the
holders of ordinary shares of ANZ, are: any proposal to reduce the share
capital of ANZ; any resolution to approve the terms of a share buy-back
arrangement; any proposal that affects the rights attached to the ANZ
Preference Shares; any proposal to wind up ANZ; any proposal for the disposal
of the whole of the property, business and undertaking of ANZ; and any matter
during the winding up of ANZ. In addition, the holders of the ANZ Preference
Shares will have the right to vote separately as a class in certain
circumstances involving a variation of the rights of holders of the ANZ
Preference Shares. Pursuant to the ADRs Security and Pledge Agreement, as long
as the ADSs are held by the Jersey Subsidiary, the Jersey Subsidiary will, or
will cause the Collateral Agent to, direct the ADR depositary to vote the ANZ
Preference Shares as directed by the holders of the TrUEPrS.
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Merrill Lynch, Pierce, Fenner & Smith Incorporated has applied to the
Commission for an exemptive order that would, if issued, among other things,
permit other investment companies and companies excepted from the definition of
investment company under Sections 3(c)(1) and 3(c)(7) of the Investment Company
Act to own more than 3% of the total outstanding TrUEPrS. Under the Declaration
of Trust, however, any such company owning TrUEPrS in excess of the limits
imposed by Sections 12(d)(1)(A)(i) and 12(d)(1)(C) of the Investment Company
Act must vote their TrUEPrS in proportion to the vote of all other holders of
TrUEPrS that are not such companies. There is no assurance that the application
for an exemptive order will be granted by the Commission.
Modifications and amendments of the terms of the TrUEPrS, the Debt Securities
and the Jersey Preference Shares may be made with the consent of not less than
a majority of the holders of the TrUEPrS; provided that, no such modification
or amendment may, without the consent of 100% of the holders of the TrUEPrS,
change the amount or timing of any dividend on the TrUEPrS, the amount or
timing of interest payments on the Debt Securities, the liquidation preference
of the Jersey Preference Shares, the redemption amount of the Debt Securities
and the Jersey Preference Shares or otherwise adversely affect the foregoing
terms. Modifications and amendments may be made without the consent of any
holder of the TrUEPrS to cure any ambiguity, defect or inconsistency in the
Declaration of Trust or any instrument defining the terms of the TrUEPrS, the
Debt Securities and the Jersey Preference Shares, provided that, such action
will not adversely affect in any material respect the rights of the holders of
the TrUEPrS.
RESTRICTIONS ON OWNERSHIP AND TRANSFER
Generally, under the Australian Corporations Law, the concept of voting share
does not include certain types of preference shares with limited voting rights.
Because holders of the ANZ Preference Shares have been conferred a right to
vote following a missed dividend, the ANZ Preference Shares will be treated as
voting shares for relevant purposes. Therefore, a person with an entitlement to
ANZ Preference Shares, including holders of TrUEPrS, should consider this
entitlement with any entitlement to other voting shares in ANZ in the context
of the regulatory thresholds summarized below and seek appropriate legal
advice.
In summary, under the Australian Corporations Law, a person or group of
persons cannot acquire voting shares in a public company if that person or
group of persons or another person would then be "entitled" (which is defined
very broadly) to more than 20% of the voting shares in ANZ unless those shares
are acquired in a manner specifically permitted by law. This restriction also
limits the options available to a shareholder wanting to sell a shareholding of
more than 20% in an Australian public company. The Australian Corporations Law
also imposes certain substantial shareholding disclosure obligations on persons
who are or become "entitled" to 5% or more of the voting shares in a company
listed on the Australian Stock Exchange, such as ANZ.
BOOK-ENTRY SYSTEM
The TrUEPrS will be issued in the form of one or more global securities (the
"Global Securities") deposited with the Depository and registered in the name
of a nominee of the Depository.
The Depository has advised the Trust and the Underwriters as follows: The
Depository is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Securities Exchange
Act of 1934, as amended. The Depository was created to hold securities of
persons who have accounts with the Depository ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of certificates. Such participants include securities brokers and
dealers, banks, trust companies and clearing corporations. Indirect access to
the Depository's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
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Upon the issuance of a Global Security, the Depository or its nominee will
credit the respective TrUEPrS represented by such Global Security to the
accounts of participants. The accounts to be credited shall be designated by
the Underwriters. Ownership of beneficial interests in such Global Securities
will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in such Global
Securities will be shown on, and the transfer of those ownership interests will
be effected only through, records maintained by the Depository or its nominee
for such Global Securities. Ownership of beneficial interests in such Global
Securities by persons that hold through participants will be shown on, and the
transfer of that ownership interest within such participant will be effected
only through, records maintained by such participant. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the TrUEPrS.
Except as set forth below, owners of beneficial interests in such Global
Securities will not be entitled to have the TrUEPrS registered in their names
and will not receive or be entitled to receive physical delivery of the TrUEPrS
in definitive form and will not be considered the owners or holders thereof.
Delivery of ADSs or payment of amounts or delivery of other consideration
deliverable on exchange of, and any quarterly distributions on, TrUEPrS
registered in the name of or held by the Depository or its nominee will be made
to the Depository or its nominee, as the case may be, as the registered owner
or the holder of the Global Security. None of the Trust, any Trustee, the
Administrator, the Paying Agent or the Custodian for the TrUEPrS will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Trust expects that the Depository, upon receipt of any payment in respect
of a Global Security, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
such Global Security as shown on the records of the Depository. The Trust also
expects that payments by participants to owners of beneficial interests in such
Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street name", and will be the
responsibility of such participants.
A Global Security may not be transferred except as a whole by the Depository
to a nominee or a successor of the Depository. If the Depository is at any time
unwilling or unable to continue as depository and a successor depository is not
appointed by the Trust within ninety days, the Trust will issue TrUEPrS in
definitive registered form in exchange for the Global Security representing
such TrUEPrS. In addition, the Trust may at any time and in its sole discretion
determine not to have any TrUEPrS represented by one or more Global Securities
and, in such extent, will issue TrUEPrS in definitive form in exchange for all
of the Global Securities representing the TrUEPrS. Further, if the Trust so
specifies with respect to the TrUEPrS, an owner of a beneficial interest in a
Global Security representing TrUEPrS may, on terms acceptable to the Trust and
the Depository for such Global Security, receive TrUEPrS in definitive form. In
any such instance, an owner of a beneficial interest in a Global Security will
be entitled to physical delivery in definitive form of TrUEPrS represented by
such Global Security equal in number to that represented by such beneficial
interest and to have such TrUEPrS registered in its name.
TRUSTEES
The Trustees of the Trust consist of three individuals, none of whom is an
"interested person" of the Trust as defined in the Investment Company Act. The
Trustees of the Trust are responsible for the overall supervision of the
operations of the Trust and perform the various duties imposed on the trustees
of management investment companies by the Investment Company Act.
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The Trustees of the Trust are:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME, AGE AND ADDRESS TITLE DURING PAST FIVE YEARS
- --------------------- ---------------- ----------------------
<S> <C> <C>
Donald J. Puglisi, 53................... Managing Trustee Professor of Finance
Department of Finance University of Delaware
University of Delaware
Newark, DE 19716
William R. Latham III, 54............... Trustee Professor of Economics
Department of Economics University of Delaware
University of Delaware
Newark, DE 19716
James B. O'Neill, 59.................... Trustee Professor of Economics
Center for Economic University of Delaware
Education & Entrepreneurship
University of Delaware
Newark, DE 19716
</TABLE>
COMPENSATION OF TRUSTEES
The annual fees and anticipated out-of-pocket expenses of each unaffiliated
Trustee and any additional fees of the Trust's Managing Trustee will be paid by
the Jersey Holding Company pursuant to an expense agreement (the "Trust Expense
Agreement") between it and The Bank of New York, as the Administrator,
Custodian and Paying Agent of the Trust. The Trustees will not receive, either
directly or indirectly, any compensation, including any pension or retirement
benefits, from the Trust. None of the Trustees receives any compensation for
serving as a trustee or director of any other affiliated investment company.
MANAGEMENT ARRANGEMENTS
PORTFOLIO MANAGEMENT AND ADMINISTRATION
The Trust will be internally managed and will not have an investment adviser.
The Trust's portfolio will consist only of US$500,100,000 aggregate principal
amount of Debt Securities (US$575,000,000 aggregate principal amount of Debt
Securities if the Underwriters' over-allotment option is exercised in full),
and any distributions thereon, and will not be actively managed. The Trustees
of the Trust will authorize the purchase of the Debt Securities as directed by
the Declaration of Trust. It is a fundamental policy of the Trust that the Debt
Securities may not be disposed of during the term of the Trust, except upon the
occurrence of an Exchange Event.
The Trust will pay all expenses incurred in the Trust's formation and other
initial expenses and expenses relating to the Offering out of the facility fee
to be paid on the Issue Date to the Trust by the U.K. Company in connection
with the investment by the Trust in the Debt Securities. The ongoing
administrative and other expenses of the Trust such as accounting services,
expenses for legal and auditing services, taxes, costs of printing proxies,
listing fees, if any, stock certificates and shareholder reports, charges of
the Administrator, the Custodian and the Paying Agent, fees and expenses of
Trustees, accounting costs, brokerage costs, litigation, mailing and other
expenses properly payable by the Trust will be paid by the Jersey Holding
Company pursuant to the Trust Expense Agreement. Subject to the satisfaction of
certain conditions, any operating expenses of the Trust not covered by the
Trust's arrangements with the Jersey Holding Company will be paid by the ANZ
Affiliate pursuant to an expense and indemnity agreement (the "Expense and
Indemnity Agreement") among it, the U.K. Company, the Trust, the Jersey Holding
Company, the Jersey Subsidiary and the Jersey Charitable Trust. See "--
Estimated Expenses."
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Administrator. The day-to-day affairs of the Trust will be managed by The
Bank of New York, as the Administrator pursuant to an administration agreement
(the "Administration Agreement"). Under the Administration Agreement, the
Trustees have delegated most of their operational duties to the Administrator,
including without limitation, the duties to: (i) pay, or cause to be paid, all
expenses incurred by the Trust;(ii) with the approval of the Trustees, engage
legal and other professional advisors (other than the independent public
accountants for the Trust); (iii) instruct the Paying Agent to pay
distributions on TrUEPrS as described herein; (iv) cause the legal and other
professional advisors engaged by it to prepare and mail, file or publish all
notices, proxies, reports, tax returns and other communications and documents
for the Trust, and keep all books and records for the Trust; (v) at the
direction of the Trustees, and upon being furnished with reasonable security
and indemnity as the Administrator may require, institute and prosecute legal
and other appropriate proceedings to enforce the rights and remedies of the
Trust; and (vi) make, or cause to be made, all necessary arrangements with
respect to meetings of Trustees and any meetings of holders of TrUEPrS. The
Administrator will not, however, select the independent public accountants for
the Trust or sell or otherwise dispose of the Trust assets (except in
connection with the occurrence of an Exchange Event).
The Administration Agreement may be terminated by either the Trust or the
Administrator upon 60 days prior written notice, except that no termination
shall become effective until a successor Administrator has been chosen and has
accepted the duties of the Administrator.
Except for its roles as Administrator, Custodian and Paying Agent of the
Trust, and except for its role as Collateral Agent under the Security and
Pledge Agreements, as paying and transfer agent for the Debt Securities and the
ANZ Preference Shares, and as depositary for the ADRs, The Bank of New York has
no other affiliation with, and is not engaged in any other transactions with,
the Trust.
The address of the Administrator is 101 Barclay Street, New York, New York
10286.
CUSTODIAN
The Trust's custodian (the "Custodian") is The Bank of New York pursuant to a
custodian agreement (the "Custodian Agreement"). In the event of any
termination of the Custodian Agreement by the Trust or the resignation of the
Custodian, the Trust must engage a new Custodian to carry out the duties of the
Custodian as set forth in the Custodian Agreement. The Custodian will also act
as Collateral Agent under the Security and Pledge Agreements, under which it
will hold a perfected security interest in the ADSs, the Jersey Preference
Shares or other assets consistent with the terms of the securities pledged
thereunder, and as depositary for the ADRs.
PAYING AGENT
The paying agent, transfer agent and registrar (the "Paying Agent") for the
TrUEPrS is The Bank of New York pursuant to a paying agent agreement (the
"Paying Agent Agreement"). In the event of any termination of the Paying Agent
Agreement by the Trust or the resignation of the Paying Agent, the Trust will
use its best efforts to engage a new Paying Agent to carry out the duties of
the Paying Agent.
INDEMNIFICATION
The Trust will, to the fullest extent permitted by applicable law, indemnify
each Trustee, the Administrator, the Paying Agent and the Custodian with
respect to any claim, liability, loss which it may incur in acting as Trustee,
Administrator, Paying Agent or Custodian, as the case may be, and any
reasonable expense incurred in connection with any such claim, liability or
loss (including the reasonable costs and expenses of the defense against any
claim or liability) except in the case of willful misfeasance, bad faith, gross
negligence or reckless disregard of their respective duties. Subject to the
satisfaction of certain conditions, pursuant to the Expense and Indemnity
Agreement, the ANZ Affiliate will reimburse the Trust for any amounts it may be
required to pay as indemnification to any Trustee, the Administrator, the
Paying Agent or the Custodian.
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ESTIMATED EXPENSES
Organization costs of the Trust in the amount of $32,000 and estimated costs
of the Trust in connection with the initial registration of the TrUEPrS and the
Offering in the amount of approximately $628,000 will be paid by the Trust out
of the facility fee to be paid on the Issue Date to the Trust by the U.K.
Company in connection with the investment by the Trust in the Debt Securities.
The ongoing administrative and other expenses of the Trust will be paid by the
Jersey Holding Company pursuant to the Trust Expense Agreement. Subject to the
satisfaction of certain conditions, any operating expenses of the Trust not
covered by the Trust's arrangements with the Jersey Holding Company will be
paid by the ANZ Affiliate pursuant to the Expense and Indemnity Agreement.
DIVIDENDS AND DISTRIBUTIONS
The Trust intends to distribute to holders dividend distributions in an
amount equal to US$500,100,000 per TrUEPrS per annum, payable quarterly in
arrears in an amount equal to US$575,000,000 per TrUEPrS on each Dividend
Payment Date to holders of record on the immediately preceding Record Date. The
first distribution in respect of the period from and including the Issue Date
to but excluding October 15, 1998 will equalUS$ per TrUEPrS.
Dividend payments on the TrUEPrS will be made from the interest payments
received by the Trust on the Debt Securities. Interest payments on the Debt
Securities will be made by the U.K. Company only to the extent that it receives
Income Entitlements as the income beneficiary of the Distribution Trust. The
U.K. Company's right to receive Income Entitlements will not represent an
absolute ownership interest in the Distribution Trust or the income thereof,
but rather an entitlement to receive Income Entitlements only to the extent
actually distributed to the U.K. Company by the Distribution Trust; if any
Income Entitlement payable on any Interest Payment Date is not paid to the U.K.
Company or at its direction on such date for any reason, the Distribution Trust
will have no further obligation to pay such Income Entitlement to the U.K.
Company and the U.K. Company will have no right to require such payment. See
"Investment Objective and Policies--Intervening Vehicles." In the event an
Income Entitlement is not paid for any reason, an Exchange Event will occur
because the U.K. Company will have insufficient funds to pay interest on the
Debt Securities.
On and after an Exchange Date, the U.K. Company will cease to be the income
beneficiary of the Distribution Trust and ANZ Funds Pty Ltd, an affiliate of
ANZ, will receive all the Income Entitlements of the Distribution Trust
thereafter; provided, however, if the Exchange Event is the cash redemption or
Buy-Back of the ANZ Preference Shares, the U.K. Company will be entitled to
receive an Income Entitlement equal to the accrued but unpaid interest on the
Debt Securities for the period from and including the Interest Payment Date
immediately preceding the Exchange Date to but excluding the Exchange Date.
On each Interest Payment Date, (i) the ANZ Borrower will make an interest
payment on the ANZ Loan to the Distribution Trust; (ii) if no Payment
Prohibition exists, the Distribution Trust will distribute such interest
payment as an Income Entitlement to the U.K. Company; and (iii) the U.K.
Company will pay (a) interest on the Debt Securities to the Trust, (b) ongoing
costs and expenses of the U.K. Company and the Jersey Subsidiary,(c) quarterly
dividend payments on the U.K. Company's voting shares to the Jersey Holding
Company, which dividends will be used by the Jersey Holding Company to pay
ongoing expenses of the Jersey Holding Company, the Jersey Charitable Trust,
the Collateral Agent and (pursuant to the Trust Expense Agreement) the Trust
and (d) an indemnity fee payable to the ANZ Affiliate. On such Interest Payment
Date (which will also be a Dividend Payment Date), the Administrator of the
Trust will use all the interest received by the Trust on the Debt Securities to
pay dividends on the TrUEPrS.
Dividend distributions on the TrUEPrS will cease to accrue on and after the
Exchange Date. In the case of any Exchange Event other than a redemption or
Buy-Back of the ANZ Preference Shares for cash, no dividend distributions will
be payable on the TrUEPrS on the Exchange Date (even if such Exchange Date is a
Dividend Payment Date). Instead, non-cumulative dividends will begin to accrue
on the ANZ Preference Shares from and
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<PAGE>
including the last Interest Payment Date in respect of which interest on the
Debt Securities has been paid or provided for in full. Accordingly, the
dividends for any quarterly dividend periods ending on or after the Exchange
Date will be payable only as dividends on the ANZ Preference Shares and only in
accordance with the terms of the ANZ Preference Shares.
NET ASSET VALUE
The net asset value of the TrUEPrS will be calculated by the Trust no less
frequently than quarterly by dividing the value of the net assets of the Trust
(the value of its assets less its liabilities) by the total number of TrUEPrS
outstanding. The Trust's net asset value will be published semi-annually as
part of the Trust's semi-annual report to holders and at such other times as
the Trustees may determine. The value of the Debt Securities held by the Trust
will be determined in good faith by the Board of Trustees pursuant to
procedures adopted by them.
TAXATION
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of TrUEPrS is based
upon the advice of Sullivan & Cromwell, counsel to ANZ. The summary addresses
only the tax consequences to persons that acquire TrUEPrS in connection with
the Offering and hold the TrUEPrS as a capital asset. It does not address all
tax consequences of the ownership of TrUEPrS and does not take into account the
specific circumstance of investors such as tax-exempt entities, banks, certain
insurance companies, broker dealers, traders in securities that elect to mark
to market, investors liable for the alternative minimum tax, investors that
hold TrUEPrS as part of a straddle or hedging or conversion transaction or
investors whose functional currency is not the U.S. dollar. The summary is
based on the Internal Revenue Code of 1986, as amended, its legislative
history, existing and proposed regulations thereunder, published rulings and
court decisions as well as the income tax treaty between the United States and
Australia (the "Treaty") all of which are subject to change possibly with
retroactive effect.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS AS
TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP
AND DISPOSITION OF TrUEPrS, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR
FOREIGN TAX LAWS.
U.S. Holders
A "U.S. Holder" is any beneficial owner of TrUEPrS that is (i) a citizen or
resident of the United States, (ii) a domestic corporation, (iii) an estate the
income of which is subject to United States Federal income tax without regard
to its source, or (iv) a trust if a court within the United States is able to
exercise primary supervision over administration of the trust and one or more
United States persons have authority to control all substantial decisions of
the trust. A "Non-U.S. Holder" is any beneficial owner that is not a United
States person for United States Federal income tax purposes.
Classification of the Trust and the Debt Securities and Distributions on
TrUEPrS. For United States federal income tax purposes the Trust will be
classified as a grantor trust and not as an association taxable as a
corporation, and the Debt Securities held by the Trust will be treated as
equity in ANZ. Accordingly, for United States Federal income tax purposes, each
U.S. Holder generally will be treated as owning equity of ANZ and will be
required to include in income, as a dividend, the holder's share of the gross
amount of the interest paid to the Trust on the Debt Securities to the extent
of the current and accumulated earnings and profits (as determined for United
States Federal income tax purposes) of ANZ. For foreign tax credit limitation
purposes the payments will be income from sources without the United States,
but generally will be treated separately, together with the other items of
"passive income" (or in the case of certain holders, "financial services
income").
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Sale of the TrUEPrS. Upon a sale or other disposition of the TrUEPrS
(including generally the receipt of a distribution of cash in redemption of all
of a U.S. Holder's TrUEPrS), a U.S. Holder will recognize gain or loss in an
amount equal to the difference between the amount realized and the U.S.
Holder's adjusted tax basis. Generally, such gain or loss will be capital gain
or loss and will be long-term capital gain or loss if the U.S. Holder's holding
period exceeds one year. Any such gain will be income from sources within the
United States for foreign tax credit limitation purposes.
Consequences of an Exchange Event. As described above under "Investment
Objective and Policies--Exchange Event" upon the occurrence of an Exchange
Event, the Trust will distribute ADSs or, under certain circumstances, cash to
holders of TrUEPrS in exchange for their TrUEPrS and in liquidation of the
Trust. A U.S. Holder's exchange of TrUEPrS for ADSs generally will not be a
taxable event for United States Federal income tax purposes. A U.S. Holder's
basis in the ADSs received upon exchange will generally be the same as the U.S.
Holder's basis in the property exchanged therefor and such holder's holding
period in the ADSs would include their holding period in such property.
Upon the occurrence of certain Exchange Events, holders of the TrUEPrS may
receive cash. For U.S. federal income tax purposes such receipt of cash would
constitute a taxable disposition of the TrUEPrS and a U.S. Holder would
generally recognize gain or loss in the same manner if there had been a sale or
disposition as described under "--Sale of the TrUEPrS" above. Amounts
representing accrued but unpaid interest on the Debt Securities will be treated
as a distribution on TrUEPrS as discussed under "--Classification of the Trust
and the Debt Securities and Distributions on TrUEPrS" above.
ADSs Received in an Exchange Event
Distributions on the ADSs. U.S. Holders will include in gross income the
gross amount of any dividend paid including Additional Amounts (as defined and
described in the accompanying prospectus of ANZ), if any, before reduction for
Australian withholding taxes by ANZ, out of its current or accumulated earnings
and profits (as determined for U.S. federal income tax purposes) as ordinary
income when the dividend is actually or constructively received by the U.S.
Holder. The dividend will not be eligible for the dividends received deduction
generally allowed to United States corporations in respect of dividends
received from other United States corporations.
Subject to certain limitations, the Australian tax withheld, if any, in
accordance with the Treaty and paid over to Australia will be creditable
against the U.S. Holder's United States federal income tax liability. For
foreign tax credit limitation purposes, the dividend will be income from
sources without the United States, but generally will be treated separately,
together with the other items of "passive income" (or in the case of certain
holders "financial services income").
Sale or Other Disposition of ADSs. A U.S. Holder will recognize gain or loss
for U.S. federal income tax purposes upon the sale or other disposition of ADSs
in an amount equal to the difference between the U.S. dollar value of the
amount realized and the U.S. Holder's adjusted tax basis (determined in U.S.
dollars) in the ADSs. Generally, such gain will be capital gain or loss, will
be long-term capital gain or loss if the U.S. Holder's holding period for the
ADSs exceeds one year and any such gain will be income from sources within the
United States for foreign tax credit limitation purposes.
PFIC Considerations
ANZ does not believe that it will be treated as a passive foreign investment
company (a "PFIC") for United States Federal income tax purposes but that is a
factual determination made annually and therefore may be subject to change.
Because a U.S. Holder of TrUEPrS will be treated as owning an equity interest
in ANZ for United States Federal income tax purposes, if ANZ were a PFIC a U.S.
Holder of TrUEPrS as well as a holder of ADSs would be subject to certain
adverse tax consequences.
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<PAGE>
Non-U.S. Holders
Distributions on the TrUEPrS and ADSs. Distributions to a Non-U.S. Holder
will not be subject to United States Federal income tax unless such
distributions are effectively connected with the conduct of a trade or business
within the United States by such Non-U.S. Holder (and are attributable to a
permanent establishment maintained in the United States by such Non-U.S.
Holder, if an applicable income tax treaty so requires as a condition for such
Non-U.S. Holder to be subject to United States taxation on a net income basis
in respect of income from TrUEPrS or ADSs), in which case such Non-U.S. Holder
generally will be subject to tax in respect of distributions in the same manner
as a U.S. Holder. Any such effectively connected distributions received by a
non-U.S. corporation may also, under certain circumstances, be subject to an
"additional branch profits" tax at a 30% rate of such lower rate as may be
specified by an applicable income tax treaty.
Sale or Disposition of the TrUEPrS and ADSs. A Non-U.S. Holder will not be
subject to United States Federal income tax in respect of gain recognized on a
sale or other disposition of TrUEPrS or ADSs unless (i) the gain is effectively
connected with a trade or business of the Non-U.S. Holder in the United States
(and is attributable to a permanent establishment maintained in the United
States by such Non-U.S. Holder, if an applicable income tax treaty so requires
as a condition for such Non-U.S. Holder to be subject to United States taxation
on a net income basis in respect of gain from the sale or other disposition of
the TrUEPrS or ADSs) or (ii) in the case of a Non-U.S. Holder who is an
individual, such holder is present in the United States for 183 or more days in
the taxable year of the sale and certain other conditions apply. Effectively
connected gains realized by a corporate Non-U.S. Holder may also, under certain
circumstances, be subject to an additional "branch profits tax" at a 30% rate
or such lower rate as may be specified by an applicable income tax treaty.
Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply to payments of
dividends made within the United States by the Trust or any of its paying
agents on the TrUEPrS or, in the case of ADSs, by a U.S. paying agent or other
U.S. intermediary and "backup withholding" at a rate of 31% will apply to such
payments made to a U.S. Holder (other than a corporation or other exempt U.S.
Holder) unless the U.S. Holder furnishes its taxpayer identification number in
the manner required by United States law and applicable regulations, certifies
that such number is correct, certifies as to no loss or exemption from backup
withholding and meets certain other conditions. A Non-U.S. Holder will be
exempt from back-up withholding provided that certain certification
requirements are satisfied.
Payment of the proceeds from the disposition of TrUEPrS or ADSs to or through
the United States office of a broker is subject to both information reporting
and backup withholding unless the holder establishes an exemption from
information reporting and backup withholding. United States information
reporting and backup withholding generally will not apply to a payment made
outside the United States of the proceeds of a sale of TrUEPrS or ADSs through
an office outside the United States of a non-United States broker. However,
United States information reporting will apply to a payment made outside the
United States of the proceeds of a sale of TrUEPrS or ADSs through an office
outside the United States of a broker (i) that is a United States person, (ii)
that derives 50% or more of its gross income for a specified three year period
from the conduct of a trade or business in the United States, (iii) that is a
"controlled foreign corporation" as to the United States, or (iv) with respect
to payments made after December 31, 1999, that is a foreign partnership if, at
any time during its tax year, one or more of its partners are U.S. persons (as
defined in U.S. Treasury Regulations) who in the aggregate hold more than 50%
of the income or capital interest in the partnership or if, at any time during
its tax year, such foreign partnership is engaged in a United States trade or
business, unless the broker has documentary evidence in its files that the
holder or beneficial owner is not a United States person or the holder or
beneficial owner otherwise establishes an exemption. Backup withholding will
not apply to such payments unless the broker has actual knowledge that the
payee is a U.S. person.
Any amounts withheld from a holder under the backup withholding rules will be
allowed as a refund or a credit against such holder's United States federal
income tax liability, provided the required information is furnished to the
Internal Revenue Service.
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CERTAIN AUSTRALIAN TAX CONSIDERATIONS
The taxation discussion below of certain Australian tax consequences is based
on the advice of PricewaterhouseCoopers Securities Limited, Australia and
outlines certain Australian tax considerations for U.S. holders in relation to
the purchase, ownership and disposition of the TrUEPrs and the acquisition,
ownership and disposition of the ANZ Preference Shares represented by the ADSs.
The discussion is intended only as a descriptive summary and does not purport
to be a complete technical analysis or listing of all potential Australian tax
effects. This discussion is based upon laws, regulations, rulings and decisions
now in effect and is subject to changes in Australian law, including in any
double taxation convention between Australia and the United States (the
"Treaty"), including retroactive changes in effective dates, or possible
differing interpretations.
Persons considering the purchase of the TrUEPrS should consult their own tax
advisors concerning the application of Australia's tax laws to their particular
situations as well as any consequences of the purchase, ownership and
disposition of TrUEPrS or the ANZ Preference Shares represented by the ADSs
arising under the laws of any other taxing jurisdiction.
The Trust would not be treated as a resident of Australia for Australian
income tax purposes. As it is not in receipt of Australian source income it
will not be subject to Australian tax on income earned. Therefore, quarterly
distributions by the Trust to non-Australian resident holders of TrUEPrS will
not be subject to Australian tax whether by withholding or otherwise.
Upon an Exchange Event, the Trust will acquire ADSs by conversion of its
holding in the Debt Securities and then immediately deliver the ADSs to the
holders of TrUEPrS. There should be no Australian tax consequences to the Trust
of the delivery of the ADSs to holders of TrUEPrS.
Alternatively, upon an Exchange Event, the Trust may receive cash repayment
of principal and interest due on the Debt Securities. No Australian tax will be
payable by the Trust on such receipts.
The sale of TrUEPrS or the ANZ Preference Shares represented by the ADSs may
generate assessable income to certain U.S. holders, such as banks, insurance
companies and other persons or institutions in the business of investment. The
provisions of the Treaty, however, are designed to ensure that this income,
less all allowable deductions, is subject to Australian tax only if the U.S.
holder who is a U.S. resident carries on business in Australia through a
permanent establishment and the income earned is effectively connected with
that permanent establishment.
The sale of TrUEPrS or ADSs by a U.S. holder will not generate a net capital
gain and therefore will not be subject to Australian capital gains tax unless:
. the ANZ Preference Shares are held by U.S. citizens or U.S. corporations
who are residents of Australia;
. the U.S. holder is a non-Australian resident but the U.S. holder and the
U.S. holder's associates together beneficially hold or at any time during
the five years prior to the sale held shares or interests in shares
representing ten percent or more in value of the issued capital of ANZ.
For the purposes of determining whether ten percent or more in value of
the issued capital is held, it is possible that any interest the U.S.
holder and the U.S. holder's associates have in the ANZ Preference Shares
by virtue of entitlements under TrUEPrS held could be aggregated with
holdings of other ANZ shares by the U.S. holder and the U.S. holder's
associates; or
. the U.S. holder is a non-Australian resident but has at any time used the
TrUEPrS or ADSs in carrying on trade or business through a permanent
establishment in Australia.
and the consideration received for the TrUEPrS or the ADSs, (or their market
value, if the disposition is not at arm's length or for no consideration)
exceeds the U.S. holder's cost base in the TrUEPrS or the ADSs after that cost
base is adjusted, where appropriate, for the effect of inflation.
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The Australian income tax rate on capital gains is the same as the ordinary
income tax rate applicable to the relevant taxpayer, subject to capital gains
tax averaging where applicable. In the case of companies this rate is presently
36%.
An individual who is a U.S. holder will be a resident of Australia if, for
example, that person:
. is domiciled in Australia, unless the person's permanent place of abode
is outside Australia; or
. has been in Australia for 183 days or more in a year of income unless
that person has a usual place of abode outside Australia and does not
intend to take up residence in Australia.
However, if that individual would be a resident of the United States for the
purposes of U.S. law, the Treaty allocates residence for the purposes of the
Treaty solely to the country in which the person maintains a permanent home (or
habitual abode) or with which the person has closer personal and economic ties.
A corporation who is a U.S. holder will be a resident of Australia if it is
incorporated in Australia or if it carries on business in Australia and has
either its central management and control in Australia or its voting power
controlled by shareholders who are residents of Australia.
Where the U.S. holder acquires ADSs on the Exchange Date, there may be
Australian tax consequences in relation to dividends paid by that Australian
listed corporation. Dividends paid by ANZ may be paid as franked or unfranked
dividends. Australian corporations are required to provide shareholders with
notices detailing the extent to which the dividend is franked or unfranked and
the deductions (if any) of dividend withholding tax. Broadly, to the extent to
which those dividends are paid out of profits which have been subject to
Australian company income tax, they will be franked dividends. Fully franked
dividends paid to a non-resident will be exempt from Australian dividend
withholding tax. Unfranked or partially franked dividends will be subject to
Australian dividend withholding tax to the extent to which the dividend is
unfranked, unless a specific exemption is available.
The interaction of Australian income tax law and the Treaty limits the
Australian dividend withholding tax on unfranked or partially franked dividends
paid to a U.S. resident who is beneficially entitled to the dividend to 15
percent of the unfranked part of the gross dividend. However, where the U.S.
resident carries on business in Australia through a permanent establishment or
performs independent personal services from a fixed base in Australia and the
holding is effectively connected with the permanent establishment or fixed
base, the 15 percent limit should not apply and a dividend withholding tax at
the rate of 30 percent should apply in respect of such dividends in such
circumstances. However, under Australian law an Australian payer of dividends
to a U.S. resident in such circumstances is only obliged to withhold at the
rate of 15 percent and, as a matter of policy, the Australian Taxation Office
does not seek to collect any further withholding tax.
Subject to certain conditions, the terms of the ANZ Preference Shares provide
for holders to be grossed-up for Australian withholding tax on payments on the
ANZ Preference Shares being dividends or amounts deemed to be dividends for
Australian tax purposes.
No stamp, issue, registration or similar taxes are payable in Australia in
connection with the issue of TrUEPrS by the Trust or of ADSs. Transfers of ANZ
Preference Shares by U.S. holders would be subject to stamp duty.
There are no specific estate, inheritance or gift taxes or duties imposed in
Australia. In practice, no Revenue Authority in any State or Territory of
Australia should seek to recover stamp duty on any transfer of or agreement to
transfer ADSs provided that the instruments are not executed and the purchaser
of the ADSs is not resident in Australia.
30
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Trust has agreed to sell to each of the
underwriters named below (the "Underwriters"), and each of the Underwriters,
for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley &
Co. Incorporated, PaineWebber Incorporated, Prudential Securities Incorporated
and Salomon Smith Barney Inc. are acting as representatives (the
"Representatives"), has severally agreed to purchase, the aggregate number of
TrUEPrS set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER TRUEPRS
----------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..............................................
Morgan Stanley & Co. Incorporated..................................
PaineWebber Incorporated...........................................
Prudential Securities Incorporated.................................
Salomon Smith Barney Inc...........................................
---
Total.........................................................
===
</TABLE>
In the Purchase Agreement, the Underwriters named therein have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
TrUEPrS being sold pursuant to the Purchase Agreement if any of such TrUEPrS
are purchased. Under certain circumstances, under the Purchase Agreement, the
commitments of non-defaulting Underwriters may be increased. In the event of a
failure to close, any funds debited from any investor's account maintained
with an Underwriter will be credited to such account and any funds received by
such Underwriter by check or money order from any investor will be returned to
such investor by check.
The Representatives have advised the Trust that the Underwriters propose to
offer the TrUEPrS offered hereby in the Offering to the public initially at
the public offering price set forth on the cover page of this Prospectus and
to certain dealers at such price less a concession not in excess of $ per
TrUEPrS; provided that such concession for sales of more than 10,000 TrUEPrS
to any single purchaser will be $ per TrUEPrS. The Underwriters may allow,
and such dealers may reallow, a discount not in excess of $ per TrUEPrS to
certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed. Investors must pay for any
TrUEPrS purchased in the initial public offering on or before , 1998.
The Trust has granted the Underwriters an option to purchase up to an
additional 2,996,000 TrUEPrS at the initial public offering price. Such
option, which will expire 30 days after the date of this Prospectus, may be
exercised solely to cover over-allotments. To the extent that the Underwriters
exercise such option, each of the Underwriters will have a firm commitment,
subject to certain conditions, to purchase from the Trust approximately the
same percentage of the option shares that the number of shares to be purchased
initially by that Underwriter is of the 20,000,000 TrUEPrS initially purchased
by the Underwriters.
In view of the fact that the proceeds of the sale of the TrUEPrS will
ultimately be invested in ADSs representing the ANZ Preference Shares, the
Purchase Agreement provides that ANZ will pay, as compensation (the
"Underwriters' Compensation") to the Underwriters, an amount in immediately
available funds of $ per TrUEPrS or $ in the aggregate (or $ in the
aggregate if the Underwriters' over-allotment option is exercised in full) for
the accounts of the several Underwriters; provided that such compensation for
sales of more than 10,000 TrUEPrS to any single purchaser will be $ per
TrUEPr and to the extent of such sales, the actual amount of Underwriters'
Compensation will be less than the aggregate amounts specified in the
preceding sentence.
The Underwriters do not intend to confirm sales of TrUEPrS offered hereby to
any accounts over which they exercise discretionary authority.
Prior to the Offering, there has been no public market for the TrUEPrS.
Application has been made to list the TrUEPrS on the NYSE. In connection with
the listing, the Underwriters will undertake that sales of TrUEPrS will meet
the NYSE's minimum distribution standards.
31
<PAGE>
In view of the fact that the proceeds of the sale of the TrUEPrS will
ultimately be invested in ADSs representing the ANZ Preference Shares, the
Trust and ANZ have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended, or to contribute to payments the Underwriters may be required to make
in respect thereof.
In connection with the formation of the Trust, ML IBK Positions, Inc., an
affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, subscribed
for and purchased 4,000 TrUEPrS for a purchase price of $100,000.
Until the distribution of the TrUEPrS is completed, rules of the Commission
may limit the ability of the Underwriters and any selling group members to bid
for and purchase the TrUEPrS. As an exception to these rules, the
Representatives are permitted to engage in certain transactions that stabilize
the price of the TrUEPrS. Such transactions consist of bids or purchases for
the purpose of pegging, fixing or maintaining the price of the TrUEPrS.
If the Underwriters create a short position in the TrUEPrS in connection
with the Offering, i.e., if they sell more TrUEPrS than are set forth on the
cover page of this Prospectus, the Representatives may reduce that short
position by purchasing TrUEPrS in the open market. The Representatives may
also elect to reduce any short position by exercising all or part of the over-
allotment option described above.
The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
TrUEPrS in the open market to reduce the Underwriters' short position or to
stabilize the price of the TrUEPrS, they may reclaim the amount of the selling
concession from the Underwriters and any selling group members who sold those
TrUEPrS as part of the Offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of a security to the extent that it
were to discourage resales of the security.
Neither the Trust nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the TrUEPrS. In
addition, neither the Trust nor any of the Underwriters makes any
representation that the Representatives will engage in such transactions or
that such transactions, once commenced, will not be discontinued without
notice.
The Trust has not authorized, or taken any action to cause, the issue or
distribution in the Commonwealth of Australia, any of its States, territories
or possessions or any political subdivision thereof ("Australia"), or to any
resident of Australia, of this Prospectus or any other document inviting
applications or offers to subscribe for or purchase the TrUEPrS offered hereby
or offering such TrUEPrS for subscription or purchase and, accordingly,
neither this Prospectus (whether in draft or definitive form) nor any such
other document may be issued or distributed in Australia or to any resident of
Australia for the purpose of inviting applications or offers to subscribe for
or purchase the TrUEPrS offered hereby.
No prospectus in relation to the TrUEPrS has been lodged with or registered
by the Australian Securities and Investments Commission. In connection with
the distribution of the TrUEPrS, each of the several Underwriters will
represent and agree that it: (a) has not (directly or indirectly) offered for
subscription or purchase or issued invitations to subscribe for or purchase
nor has it sold the TrUEPrS; (b) will not (directly or indirectly) offer for
subscription or purchase or issue invitations to subscribe for or purchase or
sell the TrUEPrS; and (c) has not distributed and will not distribute any
draft or definitive prospectus, advertisement or other offering material, in
each case in Australia or to any resident of Australia (including corporations
and other entities organized under the laws of Australia but not including a
permanent establishment of such corporations or other entities located outside
Australia).
32
<PAGE>
Each Underwriter has also in the Purchase Agreement represented and agreed
that:
(a) it has not offered or sold and prior to the date six months after the
date of issue of the TrUEPrS will not offer or sell any TrUEPrS to persons
in the United Kingdom except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to
the public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995;
(b) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation
to the TrUEPrS in, from or otherwise involving the United Kingdom; and
(c) it has only issued or passed on, and will only issue or pass on, in
the United Kingdom any document received by it in connection with the issue
of the TrUEPrS to a person who is of a kind described in Article 11(3) of
the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1996 or is a person to whom the document may otherwise lawfully be
issued or passed on.
Certain of the Underwriters render investment banking and other financial
services to ANZ from time to time.
LEGAL MATTERS
Certain legal matters will be passed upon for the Trust and the Underwriters
by their counsel, Brown & Wood llp, New York, New York. Certain matters of
Delaware law will be passed upon for the Trust by Richards, Layton & Finger
P.A., Wilmington, Delaware, special Delaware counsel to the Trust. See also
"Taxation."
EXPERTS
The statement of assets, liabilities and capital included in this Prospectus
has been audited by Deloitte & Touche LLP, independent auditors, as stated in
their opinion appearing herein, and has been included in reliance upon such
opinion given on the authority of said firm as experts in auditing and
accounting.
ADDITIONAL INFORMATION
The Trust has filed with the Commission, Washington, D.C. 20549, a
Registration Statement on Form N-2 under the Securities Act with respect to
the TrUEPrS offered hereby. Further information concerning the TrUEPrS and the
Trust may be found in the Registration Statement, of which this Prospectus
constitutes a part. The Registration Statement may be inspected without charge
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from such office after payment of the fees prescribed
by the Commission. The Commission maintains a Web site at http://www.sec.gov
containing reports, proxy and information statements and other information
regarding registrants, such as the Trust, that file electronically with the
Commission.
33
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholder of ANZ Exchangeable Preferred Trust:
We have audited the accompanying statement of assets and liabilities of ANZ
Exchangeable Preferred Trust as of September 1, 1998. This financial statement
is the responsibility of the Trust's management. Our responsibility is to
express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit
also includes assessing the accounting principles used and significant
estimates made by the Trust's management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such statement of assets and liabilities presents fairly, in
all material respects, the financial position of ANZ Exchangeable Preferred
Trust as of September 1, 1998 in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
Princeton, New Jersey
September 1, 1998
34
<PAGE>
ANZ EXCHANGEABLE PREFERRED TRUST
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 1, 1998
ASSETS
<TABLE>
<S> <C>
Cash.................................................................. $100,000
--------
Total Assets.......................................................... $100,000
========
LIABILITIES
Total Liabilities..................................................... $ 0
========
NET ASSETS............................................................ $100,000
========
NET ASSET VALUE PER TRUEPRS
4,000 TrUEPrS issued and outstanding (Note 3)......................... $ 25
========
</TABLE>
- --------
(1) The Trust was created as a Delaware business trust on July 8, 1998 and has
had no operations other than matters relating to its organization and
registration as a non-diversified, closed-end management investment
company under the U.S. Investment Company Act of 1940, as amended. Costs
incurred in connection with the organization of the Trust will be paid by
the Trust out of the facility fee paid to the Trust by the U.K. Company in
connection with the investment by the Trust in the Debt Securities. The
ongoing administrative and other expenses of the Trust will be paid by the
Jersey Holding Company pursuant to the Trust Expense Agreement. Any
expenses of the Trust not covered by the Trust's arrangements with the
Jersey Holding Company under the Trust Expense Agreement will be paid by
the ANZ Affiliate pursuant to the Expense and Indemnity Agreement.
(2) Offering expenses will be payable upon completion of the Offering and will
be paid by the Trust out of the facility fee to be paid to the Trust by
the U.K. Company in connection with the investment by the Trust in the
Debt Securities.
(3) On September 1, 1998, the Trust issued 4,000 TrUEPrS to ML IBK Positions,
Inc., an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated,
in consideration for a purchase price of $100,000.
35
<PAGE>
THE FOLLOWING PROSPECTUS OF AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
IS ATTACHED AND DELIVERED FOR CONVENIENCE OF REFERENCE ONLY. THE PROSPECTUS
OF AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED DOES NOT CONSTITUTE A
PART OF THE FOREGOING PROSPECTUS OF ANZ EXCHANGEABLE PREFERRED TRUST, NOR IS
IT INCORPORATED BY REFERENCE THEREIN.
<PAGE>
[ANZ PROSPECTUS]
[TO BE PROVIDED.]
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE TRUST OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURI-
TIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY, OR OF ANY SECURITIES OF-
FERED HEREBY, IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
AN OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS OR IN THE AFFAIRS OF THE TRUST SINCE THE DATE HEREOF OR SINCE THE
DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN. IN THE EVENT THAT ANY SUCH
CHANGE SHALL OCCUR DURING THE PERIOD IN WHICH APPLICABLE LAW REQUIRES DELIVERY
OF THIS PROSPECTUS, THIS PROSPECTUS WILL BE AMENDED OR SUPPLEMENTED ACCORDING-
LY.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary......................................................... 3
Fee Table.................................................................. 10
Structural Diagram......................................................... 11
The Trust.................................................................. 12
Use of Proceeds and Collateral Arrangements................................ 12
Investment Objective and Policies.......................................... 13
Investment Restrictions.................................................... 18
Risk Factors............................................................... 18
Description of the TrUEPrS................................................. 20
Trustees................................................................... 22
Management Arrangements.................................................... 23
Dividends and Distributions................................................ 25
Net Asset Value............................................................ 26
Taxation................................................................... 26
Underwriting............................................................... 31
Legal Matters.............................................................. 33
Experts.................................................................... 33
Additional Information..................................................... 33
Independent Auditors' Report............................................... 34
Statement of Assets and Liabilities........................................ 35
</TABLE>
Prospectus relating to Preference Shares
of Australia and New Zealand Banking Group Limited
---------------
UNTIL , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING), ALL DEALERS
EFFECTING TRANSACTIONS IN THE TRUEPRS, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY REQUIRE-
MENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
20,000,000 TRUEPRS SM
ANZ EXCHANGEABLE
PREFERRED TRUST
---------------
PROSPECTUS
---------------
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY
SEPTEMBER , 1998
SM Service mark of Merrill Lynch & Co., Inc.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
1. FINANCIAL STATEMENTS
Independent Auditors' Report
Statement of Assets, Liabilities and Capital as of September 1, 1998
2. EXHIBITS
<TABLE>
<C> <S>
(a)(1) Trust Agreement*
(2) Form of Amended and Restated Trust Agreement**
(3) Restated Certificate of Trust
(b) Not applicable
(c) Not applicable
Form of Specimen certificate for TrUEPrS (included in Exhibit
(d)(1) 2(a)(2))**
(2) Portions of the Amended and Restated Trust Agreement of the
Registrant defining the rights of Holders of TrUEPrS+**
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h) Form of Purchase Agreement**
(i) Not applicable
(j) Form of Custodian Agreement**
(k)(1) Form of Administration Agreement**
(2) Form of Paying Agent Agreement**
(3) Form of Specimen for Debt Securities**
(4) Form of ADRs Security and Pledge Agreement**
(5) Form of Jersey Preference Shares Security and Pledge Agreement**
(6) Form of Trust Reimbursement Agreement**
(7) Form of Trust Expense Agreement**
(8) Form of Expense and Indemnity Agreement**
(9) Form of Debt Securities Subscription Agreement**
(l) Opinion and Consent of Brown & Wood llp, counsel to the Trust
(m) Not applicable
(n)(1) Tax Opinion and Consent of Sullivan & Cromwell**
(2) Tax Opinion and Consent of PricewaterhouseCoopers Securities
Limited, Australian tax adviser to the Trust
Consent of Deloitte & Touche LLP, independent auditors for the
(3) Trust
(o) Not applicable
(p) Form of TrUEPrS Subscription Agreement**
(q) Not applicable
(r) Not applicable
</TABLE>
- --------
+ Reference is made to Article III (Section 3.2), Article IV, Article V and
Article VII (Sections 7.1 and 7.6) of the Trust's Amended and Restated
Trust Agreement filed as Exhibit (a)(2) to this Registration Statement
* Previously filed.
** To be filed by amendment.
ITEM 25. MARKETING ARRANGEMENTS
See Exhibits (h)(1) and (h)(2) to this Registration Statement.
C-1
<PAGE>
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be incurred in connection with the offering described in
this Registration Statement will be paid by the Trust out of the facility fee
paid on the Issue Date to the Trust by the U.K. Company in connection with the
investment by the Trust in the Debt Securities.
ITEM 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Trust will be internally managed and will not have an investment
adviser. The information in the Prospectus under the caption "Management
Arrangements" is incorporated herein by reference.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
There will be one record holder of the TrUEPrS as of the effective date of
this Registration Statement.
ITEM 29. INDEMNIFICATION
Section 6.06 of the Amended and Restated Trust Agreement and Section 6 of
the U.S. Purchase Agreement provide for indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "1933 Act"), may be permitted to trustees, officers
and controlling persons of the Registrant, pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission (the "Commission") such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such trustee, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The Trust is internally managed and does not have an investment adviser.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder are maintained at the offices of the Registrant (850
Library Avenue, Suite 204, Newark, Delaware 19715), its custodian (101 Barclay
Street, New York, New York 10286) and its paying agent (101 Barclay Street,
New York, New York 10286).
ITEM 32. MANAGEMENT SERVICES
Not applicable.
ITEM 33. UNDERTAKINGS
(a) The Registrant hereby undertakes to suspend the offering of the shares
covered hereby until it amends its prospectuses contained herein if (1)
subsequent to the effective date of this Registration Statement, its net asset
value per share declines more than 10 percent from its net asset value per
share as of the effective date of the Registration Statement or (2) the net
asset value per share increases to an amount greater than its net proceeds as
stated in the prospectuses contained herein.
C-2
<PAGE>
(b) The Registrant hereby undertakes that (i) for purpose of determining any
liability under the 1933 Act, the information omitted from the form of
prospectuses filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the registrant under
Rule 497(h) under the 1933 Act shall be deemed to be part of this registration
statement as of the time it was declared effective; (ii) for the purpose of
determining any liability under the 1933 Act, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide offering
thereof.
C-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940, THE REGISTRANT HAS DULY CAUSED THIS AMENDMENT
TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEWARK, STATE OF DELAWARE, ON THE
2ND DAY OF SEPTEMBER, 1998.
ANZ Exchangeable Preferred Trust
/s/ Donald J. Puglisi
By: _________________________________
DONALD J. PUGLISI
MANAGING TRUSTEE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS,
IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<S> <C>
NAME TITLE
DATE
/s/ Donald J. Puglisi Managing Trustee September 2, 1998
- -------------------------------------
DONALD J. PUGLISI
William R. Latham III* Trustee
- -------------------------------------
WILLIAM R. LATHAM III
James B. O'Neill* Trustee
- -------------------------------------
JAMES B. O'NEILL
*By: /s/ Donald J. Puglisi September 2, 1998
- -------------------------------------
DONALD J. PUGLISI
ATTORNEY-IN-FACT
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
(a)(1) Trust Agreement*
(2) Form of Amended and Restated Trust Agreement**
(3) Restated Certificate of Trust
(b) Not applicable
(c) Not applicable
(d)(1) Form of Specimen certificate for TrUEPrS (included in Exhibit
2(a)(2))**
(2) Portions of the Amended and Restated Trust Agreement of the
Registrant
defining the rights of Holders of TrUEPrS+
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h) Form of Purchase Agreement**
(i) Not applicable
(j) Form of Custodian Agreement**
(k)(1) Form of Administration Agreement**
(2) Form of Paying Agent Agreement**
(3) Form of Specimen for Debt Securities**
(4) Form of ADRs Security and Pledge Agreement**
(5) Form of Jersey Preference Shares Security and Pledge
Agreement**
(6) Form of Trust Reimbursement Agreement**
(7) Form of Trust Expense Agreement**
(8) Form of Expense and Indemnity Agreement**
(9) Form of Debt Securities Subscription Agreement**
(l) Opinion and Consent of Brown & Wood LLP, counsel to the Trust
(m) Not applicable
(n)(1) Tax Opinion and Consent of Sullivan & Cromwell**
(2) Tax Opinion and Consent of PricewaterhouseCoopers Securities
Limited, Australian tax adviser to the Trust
(3) Consent of Deloitte & Touche LLP, independent auditors for the
Trust
(o) Not applicable
(p) Form of TrUEPrS Subscription Agreement**
(q) Not applicable
(r) Not applicable
</TABLE>
- --------
+ Reference is made to Article III (Section 3.2), Article IV, Article V and
Article VII (Sections 7.1 and 7.6) of the Trust's Amended and Restated
Trust Agreement filed as Exhibit (a)(2) to this Registration Statement.
*Previously filed.
**To be filed by amendment.
<PAGE>
EXHIBIT (a)(3)
RESTATED CERTIFICATE OF TRUST OF
ABC EXCHANGEABLE PREFERRED TRUST
This Restated Certificate of Trust of ABC Exchangeable Preferred Trust (the
"Trust"), dated as of September 1, 1998, is being duly executed and filed by the
undersigned, as the only trustees of the Trust, to amend and restate the
original Certificate of Trust of the Trust which was filed on July 8, 1998 with
the Secretary of State of the State of Delaware (the "Secretary of State") under
the Delaware Business Trust Act (12 Del. C. (S) 3801 et seq.) (the "Original
--- - -- ---
Certificate of Trust").
The Original Certificate of Trust is hereby restated in its entirety to
read as follows:
1. Name. The name of the business trust formed hereby is ANZ Exchangeable
----
Preferred Trust.
2. Registered Office: Registered Agent. The business address of the
-----------------------------------
registered office of the Trust in the State of Delaware is One Rodney Square,
10th Floor, 10th and King Streets, City of Wilmington, County of New Castle
19801. The name of the Trust's registered agent at such address is RL&F Service
Corp.
3. Effective Date. This Restated Certificate of Trust shall be effective
--------------
as of its filing with the Secretary of State.
4. Other Matters. The Trust will be a registered investment company under
-------------
the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have
duly executed this Restated Certificate of Trust in accordance with Section
3811(a) of the Delaware Business Trust Act as of the date first above written.
/s/ Donald J. Puglisi
By:_________________________________
Donald J. Puglisi, as Trustee
/s/ William R. Latham III
By:__________________________________
William R. Latham III, as Trustee
/s/ James B. O'Neill
By:__________________________________
James B. O'Neill, as Trustee
<PAGE>
EXHIBIT (1)
Brown & Wood LLP
One World Trade Center
New York, New York 10048-0557
September 3, 1998
ANZ Exchangeable Preferred Trust
c/o Puglisi & Associates
850 Library Avenue
Suite 204
Newark, Delaware 19715
Ladies and Gentlemen:
We have acted as counsel for ANZ Exchangeable Preferred Trust, a Delaware
business trust (the "Trust"), in connection with the registration of Trust Units
Exchangeable for Preference Shares(SM) ("TrUEPrS"(SM)), under the Securities Act
of 1933, as amended, pursuant to a registration statement on Form N-2 to be
filed with the Securities and Exchange Commission on the date hereof (the
"Registration Statement").
As counsel for the Trust, we are familiar with the proceedings taken by the
Trust in connection with the authorization, issuance and sale of the TrUEPrS.
In addition, we have examined and are familiar with the Certificate of Trust of
the Trust, the Restated Certificate of Trust, the Amended and Restated Trust
Agreement of the Trust and such other documents as we have deemed relevant to
the matters referred to in this opinion.
Based upon the foregoing, we are of the opinion that the TrUEPrS, upon
issuance and sale in the manner referred to in the Registration Statement, will
be legally issued, fully paid and non-assessable TrUEPrS of the Trust.
In rendering this opinion, we have relied as to matters of Delaware law
upon an opinion of Richards, Layton & Finger, P.A. rendered to the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectus constituting
a part thereof.
Very truly yours,
/s/Brown & Wood LLp
________________________________
(SM) Service mark of Merrill Lynch & Co., Inc.
<PAGE>
[LETTERHEAD OF PRICEWATERHOUSECOOPERS]
EXHIBIT (n)(2)
ANZ Exchangeable Preferred Trust
c/o Puglisi & Associates
850 Library Avenue, Suite 204
Newark, Delaware 19715
U.S.A.
September 3, 1998
Ladies and Gentlemen
Registration Statement on Form N-2
File Nos 333-58751 and 811-08865
We have acted as tax counsel to the ANZ Exchangeable Preferred Trust (the "Trust
") in connection with the registration of its Trust Units Exchangeable for
Preference Shares(SM) (TrUEPrS(SM)). In connection therewith, we have prepared
the discussion set forth under the captions "Prospectus Summary - Certain Tax
Considerations - Australia" and "Taxation - Australian Tax Considerations" (the
"Discussion") in the Prospectus (the "Prospectus") that is part of Pre-Effective
Amendment No 2 to the Registration Statement on Form N-2 (File Nos. 333-58751
and 811-08865) (the "Registration Statement") filed by the Trust with the
Securities and Exchange Commissioner on September 3, 1998.
We hereby confirm our opinion as set forth in the Discussion. In rendering our
opinion, we have examined the Amended and Restated Trust Agreement of the Trust
and those transaction documents we considered relevant to our opinion, each in
the form to be filed as an exhibit to the Registration Statement, and have
assumed that the obligations contemplated thereunder will be performed in
accordance with their terms.
We hereby consent to the filing of this opinion as an opinion as an exhibit to
the Registration Statement and to the use of our name under the caption
"Taxation - Australian Tax Consideration" in the Prospectus. The issuance of
such consent does not concede that we are an "expert" for the purposes of the
Securities Act of 1933.
Very truly yours
/s/ A.E. Clemens
___________________________________________
(SM) Service mark of Merrill Lynch & Co Inc
<PAGE>
Exhibit (n)(3)
INDEPENDENT AUDITORS' CONSENT
ANZ Exchangeable Preferred Trust:
We consent to the inclusion in this Pre-Effective Amendment No. 2 to
Registration Statement Nos. 333-58751 and 811-08865 of ANZ Exchangeable
Preferred Trust (the "Trust") on Form N-2 of our report dated September 1, 1998
relating to the audit of the statement of assets and liabilities of the Trust
and to the reference to us under the heading "Experts" in the Prospectus, which
is a part of this Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Princeton, New Jersey
September 1, 1998
