<PAGE>
PROSPECTUS
16,000,000 TRUEPRS(SM)
ANZ EXCHANGEABLE PREFERRED TRUST
---------------
Each of the Trust Units Exchangeable for Preference Shares(SM) ("TrUEPrS")
offered hereby (the "Offering") will represent a proportionate share of a
beneficial ownership interest in the Trust and, as described herein, upon the
occurrence of an Exchange Event (as defined herein), will be exchanged for
either (i) 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") or (ii) cash in an amount of US$25 per TrUEPrS, plus the
accrued dividend distributions thereon for the current quarterly dividend
period. Each TrUEPrS 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$2.00 per TrUEPrS
per annum, payable quarterly in arrears in an amount equal to US$.50 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"), except as described herein. The first dividend distribution in
respect of the period from and including September 23, 1998 (the "Issue Date")
to but excluding October 15, 1998 will equal US$.1222 per TrUEPrS.
(continued on following page)
SEE "PROSPECTUS SUMMARY--RISK FACTORS," BEGINNING ON PAGE 8 OF THIS
PROSPECTUS, AND "RISK FACTORS," BEGINNING ON PAGE 19 OF THIS PROSPECTUS, FOR
CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE TRUEPRS.
The TrUEPrS have been approved for listing on the New York Stock Exchange
(the "NYSE"), subject to official notice of issuance. Trading of the TrUEPrS
on the NYSE is expected to commence within the 30-day period after the Issue
Date. See "Underwriting."
---------------
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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO SALES PROCEEDS TO
PUBLIC(1) LOAD(2) TRUST(3)(4)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per TrUEPrS.................................. $25.00 (4) $25.00
- --------------------------------------------------------------------------------
Total(5)..................................... $400,000,000 (4) $400,000,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Plus accrued dividend distributions, if any, from September 23, 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 $630,000 payable by the Trust. See
"Management Arrangements--Estimated Expenses."
(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"),
$.7875 per TrUEPrS or $12,600,000 in the aggregate (or $14,486,850 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 $.50 per TrUEPrS and, to the
extent such sales are made, 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 2,396,000 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
$459,900,000. 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 September 23, 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 September 15, 1998.
<PAGE>
(continued from cover page)
The Trust is a newly-created Delaware business trust established for the
sole purpose of (a) issuing the TrUEPrS, (b) investing the proceeds thereof in
and holding 8% Mandatorily Redeemable Debt Securities due 2047 (the "Debt
Securities") issued by Carlotta (UK) Company, a special purpose unlimited
company incorporated under the laws of England and Wales, and domiciled in the
United Kingdom (the "U.K. Company"), with an aggregate principal amount equal
to such proceeds and (c) entering into the ADSs Purchase Contract between the
Trust and the Jersey Subsidiary herein referred to (the "ADSs Purchase
Contract"). 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, (i) if the Exchange Event is anything other than a redemption or
mandatory repurchase (such mandatory repurchase being a "Buy-Back") of the ANZ
Preference Shares for cash, 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 US$25
principal amount of the Debt Securities from and including the Interest
Payment Date immediately preceding the Exchange Date to but excluding such
Exchange Date. Prior to the Exchange Date, the ANZ Preference Shares will not
pay dividends. On and after the Exchange Date (unless the Exchange Event is
the redemption or Buy-Back of the ANZ Preference Shares for cash), each ANZ
Preference Share will accrue non-cumulative dividends at the rate of US$.50
per share per annum, payable quarterly in arrears in an amount equal to
US$.125 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 (a) to invest 100% of its portfolio
in the Debt Securities and not to dispose of the Debt Securities during the
term of the Trust other than in connection with a mandatory redemption thereof
as a result of an Exchange Event and (b) to enter into the ADSs Purchase
Contract and not to dispose of the ADSs Purchase Contract during the term of
the Trust. 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
delivered in exchange for TrUEPrS 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."
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 16,000,000 TrUEPrS, each representing a proportionate
share of beneficial interest in the assets of 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 2,396,000 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 will also
enter into the ADSs Purchase Contract. 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 8%. 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 of ANZ Preference Shares by
ANZ to the ADR depositary and the issuance of ADSs by the ADR depositary to the
Jersey Subsidiary equal to the aggregate liquidation preference of the 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 the holder of the Jersey Preference
Shares (initially the U.K. Company) to secure its redemption obligations under
the Jersey Preference Shares and to the Trust to secure its obligation to
deliver ADSs under the ADSs Purchase Contract. Also pursuant to the ADRs
Security and Pledge Agreement, the U.K. Company, with the consent of the Jersey
Subsidiary, will irrevocably and unconditionally assign and hypothecate its
interest in 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
3
<PAGE>
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 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.
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 one or more
loans (each, an "ANZ Loan") to ANZ and/or one or more wholly-owned subsidiaries
or branches of ANZ (each, an "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, (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$2.00 per TrUEPrS per annum,
payable quarterly in arrears in an amount equal to US$.50 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$.1222 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 thereafter; provided,
however, if the Exchange Event is the cash redemption or Buy-Back of the ANZ
Preference
4
<PAGE>
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 instrument or agreement 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
Prior to the Exchange Date, the Trust's assets will consist of (a)
US$400,100,000 aggregate principal amount of Debt Securities (US$460,000,000
aggregate principal amount of Debt Securities if the Underwriters' over-
allotment option is exercised in full), and any distributions thereon, and (b)
the ADSs Purchase Contract. See "Investment Objective and Policies--Trust
Assets."
EXCHANGE EVENT
The earliest occurrence of any of the following dates or events shall
constitute an "Exchange Event" as of the "Exchange Date" applicable to such
Exchange Event as specified below:
(i) October 15, 2047 or 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 or any successor or
5
<PAGE>
replacement body ("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 such case being the "Required Percentage"),
and is not increased by ANZ to at least the 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 direct or indirect
wholly-owned subsidiary or branch of ANZ;
(viii) any ANZ Borrower ceases to be ANZ or a direct or indirect wholly-
owned subsidiary or branch of ANZ, in which case the Exchange Date will be
the date on which such ANZ Borrower ceases to be ANZ or a direct or
indirect 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 any 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, any ANZ Borrower may, with the consent of the
Distribution Trust, assign its ANZ Loan or the Distribution Trust may replace
any ANZ Loan with another loan, in each case, to ANZ or to one or more direct
or indirect wholly-owned subsidiaries or branches of ANZ with prospective
payment terms identical to, and other terms substantially the same as, those of
such ANZ Loan, in which case ANZ or such other subsidiary or branch and loan
will be deemed to be such ANZ Borrower and such 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 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.
Prior to the Exchange Date, the Trust's portfolio will consist only of (a)
US$400,100,000 aggregate principal amount of Debt Securities (US$460,000,000
aggregate principal amount of Debt Securities if the Underwriters' over-
allotment option is exercised in full), and any distributions thereon, and (b)
the ADSs Purchase Contract. The Trust's portfolio 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 and securities intermediary 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 (a) to invest 100% of its
portfolio in the Debt Securities, and the distributions thereon, and not to
dispose of the Debt Securities during the term of the Trust other than in
connection with a mandatory redemption thereof as a result of an Exchange
Event, and (b) to enter into the ADSs Purchase Contract and not to dispose of
the ADSs Purchase Contract during the term of the Trust. 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
prior to the Exchange Date 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.
8
<PAGE>
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.
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
The TrUEPrS have been approved for listing on the NYSE, subject to official
notice of issuance. Trading of the TrUEPrS on the NYSE is expected to commence
within the 30-day period after the Issue Date.
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 $598,000, 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, 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 $310,000 in the aggregate or 0.078% 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 $400,100,000 (or
$460,000,000 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$400,100,000 aggregate principal amount (or US$460,000,000 aggregate
principal amount if the Underwriters' over-allotment option is exercised in
full) of 8% Mandatorily Redeemable Debt Securities due 2047 (the "Debt
Securities") from Carlotta (UK) Company, a special purpose unlimited company
incorporated under the laws of England and Wales, 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 8%,
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. See
"Investment Objective and Policies--Trust Assets."
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$25 (i.e., the aggregate liquidation preference of the four
ANZ Preference Shares represented thereby). No dividends will accrue or be
paid on the ANZ Preference Shares represented by the ADSs unless an Exchange
Event (other than a redemption or mandatory repurchase (such mandatory
repurchase being a "Buy-Back") of the ANZ Preference Shares) occurs. On and
after such an Exchange Date, non-cumulative dividends will be payable, if and
when declared by the board of directors of ANZ out of profits legally
available therefor, in U.S. dollars in an amount equal to US$.50 per ANZ
Preference Share per annum, payable quarterly in arrears in an amount equal to
US$.125 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 one or more loans (each, an "ANZ Loan")
to ANZ and/or one or more wholly-owned subsidiaries or branches of ANZ (each,
an "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 the holder of the Jersey Preference Shares (initially
the U.K. Company) to secure its redemption obligations under the Jersey
Preference Shares and to the Trust to secure its obligation to deliver ADSs
under the ADSs Purchase Contract, (ii) the U.K. Company, with the consent of
the Jersey Subsidiary, will irrevocably and unconditionally assign and
hypothecate to the Trust its interest in 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 for cash), 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 to one ADS and
the four ANZ Preference Shares represented thereby.
The Trust will also enter into the ADSs Purchase Contract between the Trust
and the Jersey Subsidiary (the "ADSs Purchase Contract") pursuant to which the
Jersey Subsidiary will deliver the ADSs to the Trust for distribution to the
holders of TrUEPrS after the occurrence of an Exchange Event (other than a
redemption or Buy-Back of the ANZ Preference Shares for cash) and the
redemption of the Debt Securities and the Jersey Preference Shares.
The Debt Securities, the Jersey Preference Shares (if applicable), the ADSs
Purchase Contract and (if applicable) the ADSs to be purchased pursuant to the
terms of the ADSs Purchase Contract 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, (i) if the Exchange Event is anything other than a redemption or
mandatory repurchase ("Buy-Back") of the ANZ Preference Shares for cash, 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$25 principal amount of the Debt
Securities from and including the Interest Payment Date immediately preceding
the Exchange Date to but excluding such Exchange Date. Upon the occurrence of
an Exchange Event, the ANZ Preference Shares will accrue non-cumulative
dividends at the rate of US$.50 per share per annum, payable quarterly in
arrears in an amount equal to US$.125 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 (a) to invest 100% of its portfolio in the Debt Securities, and any
distributions thereon, and not to dispose of the Debt Securities during
13
<PAGE>
the term of the Trust other than in connection with a mandatory redemption
thereof as a result of an Exchange Event and (b) to enter into the ADSs
Purchase Contract and not to dispose of the ADSs Purchase Contract during the
term of the Trust. The foregoing fundamental policy of the Trust may not be
changed without the vote of 100% of the holders of the TrUEPrS.
TRUST ASSETS
Prior to an Exchange Date, the Trust's assets will consist of (a)
US$400,100,000 aggregate principal amount of Debt Securities (US$460,000,000
aggregate principal amount of Debt Securities if the Underwriters' over-
allotment option is exercised in full), and any distributions thereon, and (b)
the ADSs Purchase Contract.
As described above under "--General," upon the occurrence of an Exchange
Event, each TrUEPrS will be exchanged for either (i) one ADS or (ii) US$25 in
cash plus the accrued dividend distribution thereon for the current quarterly
dividend period. The procedure by which the Trust will obtain the ADSs or cash
to be distributed to the holders of TrUEPrS will vary depending upon the
nature of the Exchange Event and, in the case of an Exchange Event resulting
from a redemption or Buy-Back of the ANZ Preference Shares for cash, the
value, for purposes of calculating United Kingdom tax on capital gains, of one
U.S. dollar or the equivalent thereof in any successor legal currency of the
United States in terms of British pounds or the equivalent thereof in any
successor legal currency of the United Kingdom (the "Dollar Value") on the
Exchange Date (expressed as (Pounds)/US$).
In the case of any Exchange Event other than a redemption or Buy-Back of the
ANZ Preference Shares for cash, the Trust will obtain the ADSs to be
distributed to holders of TrUEPrS as a result of the following sequence of
events: (i) the U.K. Company will redeem the Debt Securities for cash at their
aggregate principal amount, (ii) under the terms of the Debt Securities, the
cash proceeds from the redemption referred to in clause (i) above will
automatically be applied to effect the purchase by the Trust of the Jersey
Preference Shares from the U.K. Company, (iii) the Jersey Subsidiary will
redeem the Jersey Preference Shares for cash at their aggregate liquidation
preference, and (iv) under the terms of the ADSs Purchase Contract, the cash
redemption proceeds of the Jersey Preference Shares will be used by the Trust
to purchase the ADSs from the Jersey Subsidiary.
In the case of an Exchange Event resulting from a redemption or Buy-Back of
the ANZ Preference Shares for cash, the Trust will obtain the cash to be
distributed to the holders of TrUEPrs as a result of one of the two sequences
described below, depending on the Dollar Value on the Exchange Date.
If the Dollar Value on the Exchange Date is higher than the Dollar Value on
any date on which the ANZ Preference Shares are originally issued (i.e., if
the British pound has depreciated against the U.S. dollar between such dates),
then the sequence of events preceding the distribution of cash to holders of
TrUEPrS will be as follows: (i) the U.K. Company will redeem the Debt
Securities for cash at their aggregate principal amount plus accrued interest
from and including the Interest Payment Date immediately preceding the
Exchange Date to but excluding the Exchange Date, (ii) under the terms of the
Debt Securities, the cash proceeds from the redemption referred to in clause
(i) above (excluding the accrued interest portion thereof) will automatically
be applied to effect the purchase by the Trust of the Jersey Preference Shares
from the U.K. Company, (iii) there will be a redemption or Buy-Back of the ANZ
Preference Shares for cash in an amount equal to their aggregate liquidation
preference, and (iv) the Jersey Subsidiary will use the cash proceeds from the
redemption or Buy-Back referred to in clause (iii) above to redeem the Jersey
Preference Shares for cash at their aggregate liquidation preference.
If the Dollar Value on the Exchange Date is equal to or less than the Dollar
Value on any date on which the ANZ Preference Shares are originally issued
(i.e., if the British pound has remained the same or appreciated against the
U.S. dollar between such dates), then the sequence of events preceding the
distribution of cash to holders of TrUEPrS will be as follows: (i) there will
be a redemption or Buy-Back of the ANZ Preference Shares for cash in an amount
equal to their aggregate liquidation preference, (ii) the Jersey Subsidiary
will use the cash proceeds from the redemption or Buy-Back referred to in
clause (i) above to redeem the Jersey Preference Shares for cash at their
aggregate liquidation preference, and (iii) the U.K. Company will use the
proceeds from the redemption of the Jersey Preference Shares referred to in
clause (i) above and the Income Entitlement it receives on the Exchange Date
to redeem the Debt Securities for cash at their aggregate principal amount
plus accrued interest from and including the Interest Payment Date immediately
preceding the Exchange Date to but excluding such Exchange Date.
14
<PAGE>
Except as described herein, holders of the TrUEPrS will receive non-
cumulative dividend distributions in an amount equal to US$2.00 per TrUEPrS
per annum, payable quarterly in arrears in an amount equal to US$.50 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 dividend distribution in respect of the period from
and including September 23, 1998 (the "Issue Date") to but excluding October
15, 1998 will equal US$.1222 per TrUEPrS. The Record Date for such first
dividend distribution will be October 1 or, with respect to TrUEPrS issued
after October 1 and before October 15, the date of issuance thereof. 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 any city or cities in which the principal place of
business of any ANZ Borrower is located 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 earliest occurrence of any of the following dates or events shall
constitute an "Exchange Event" as of the "Exchange Date" applicable to such
Exchange Event as specified below:
(i) October 15, 2047 or 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 or any successor or replacement
body ("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 such case being the "Required Percentage"), and is not
increased by ANZ to at least the 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
15
<PAGE>
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 direct or indirect
wholly-owned subsidiary or branch of ANZ;
(viii) any ANZ Borrower ceases to be ANZ or a direct or indirect wholly-
owned subsidiary or branch of ANZ, in which case the Exchange Date will be
the date on which such ANZ Borrower ceases to be ANZ or a direct or
indirect 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, any ANZ Borrower may, with the consent of the
Distribution Trust, assign its ANZ Loan or the Distribution Trust may replace
any ANZ Loan with another loan, in each case, to ANZ or to another directly or
indirectly wholly-owned subsidiary or branch of ANZ with prospective payment
terms identical to, and other terms substantially the same as, those of such
ANZ Loan, in which case ANZ or such other subsidiary or branch and loan will
be deemed to be such ANZ Borrower and such ANZ Loan, respectively, and any
such action will not constitute an Exchange Event.
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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 the Trust will distribute to holders of
the TrUEPrS one ADS per TrUEPrS. If a redemption or Buy-Back of the ANZ
Preference Shares for cash occurs, then the Trust will distribute to holders
of the TrUEPrS cash in the amount of US$25 per TrUEPrS, plus the accrued
dividends thereon for the current quarterly dividend period. After the
occurrence of any such Exchange Event, the Collateral Agent will deliver the
ADSs or the cash, 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 but 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 ADSs 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 England and Wales, 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").
The U.K. Company was established for the purpose of, among other things,
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
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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 unless an Exchange Event (other than a redemption or
Buy-Back of the ANZ Preference Shares for cash if the Dollar Value on the
Exchange Date is equal to or less than the Dollar Value on any date on which
the ANZ Preference Shares are originally issued) occurs, in which case, the
U.K. Company will sell all the ordinary shares it owns in the Jersey
Subsidiary to the Jersey Holding Company immediately prior to the redemption
of the Jersey Preference Shares. The Jersey Subsidiary was established for the
purpose of, among other things, issuing the Jersey Preference Shares 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$400,100,000 (or
US$460,000,000 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 date on which such loan is made and be due and
payable on each Interest Payment Date at the rate of 8.25% 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 8% (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 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
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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
redemption or Buy-Back of ANZ Preference Shares for cash, 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 instrument or
agreement 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 (a) the Debt Securities and any
distributions thereon, (b) the Jersey Preference Shares, if applicable, and
(c) if applicable, the ADSs to be purchased pursuant to the ADSs Purchase
Contract; 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 (a) 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, other than in connection with a mandatory redemption
thereof as a result of an Exchange Event, and (b) to enter into the ADSs
Purchase Contract and not to dispose of the ADSs Purchase Contract during the
term of the Trust.
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 (a) 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, other than in connection
with a mandatory redemption thereof as a result of an Exchange Event, and (b)
to enter into the ADSs Purchase Contract and not to dispose of the ADSs
Purchase Contract during the term of the Trust. 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
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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.
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. The TrUEPrS have been approved
for listing on the New York Stock Exchange (the "NYSE"), subject to official
notice of issuance. Trading of the TrUEPrS on the NYSE is expected to commence
within the 30-day period after the Issue Date. 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 TrUEPrS 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
Prior to the Exchange Date, the Trust's assets will consist of (a) the Debt
Securities and distributions thereon and (b) the ADSs Purchase Contract. 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
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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. 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 or 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
assets of the Trust. A total of 16,000,000 TrUEPrS will be issued in the
Offering, assuming no exercise of the Underwriters' over-allotment option, and
excluding 4,000 TrUEPrS issued to ML IBK Positions, Inc. in accordance with
the requirements of the Investment Company Act. 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
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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.
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, the ADSs Purchase Contract 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,
the purchase price for or the number of ADSs deliverable pursuant to the ADSs
Purchase Contract or otherwise adversely affect the foregoing terms or cause
an Exchange Event to occur. 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 or the
ADSs Purchase Contract, provided that, such action will not adversely affect
in any material respect the rights of the holders of the TrUEPrS or cause an
Exchange Event to occur.
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
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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.
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.
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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.
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. Prior to the Exchange Date, the Trust's portfolio will consist only
of (a) US$400,100,000 aggregate principal amount of Debt Securities
(US$460,000,000 aggregate principal amount of Debt Securities if the
Underwriters' over-allotment option is exercised in full), and any
distributions thereon, and (b) the ADSs Purchase Contract. The Trust's
portfolio 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 other than in connection with
a mandatory redemption thereof as a result of an Exchange Event, and that the
ADSs Purchase Contract not be disposed of during the term of the Trust.
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,
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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."
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 and securities intermediary
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 on behalf of the Trust, 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
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<PAGE>
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.
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 $598,000 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$2.00 per TrUEPrS per annum, payable quarterly in arrears in
an amount equal to US$.50 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$.1222 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 the 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.
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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
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 (a) the Debt Securities and (b) the
ADSs Purchase Contract 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
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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").
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
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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.
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.
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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.
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 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;
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.
31
<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............................................ 2,176,000
Morgan Stanley & Co. Incorporated................................ 2,176,000
PaineWebber Incorporated......................................... 2,176,000
Prudential Securities Incorporated............................... 2,176,000
Salomon Smith Barney Inc. ....................................... 2,176,000
ABN AMRO Incorporated............................................ 160,000
Robert W. Baird & Co. Incorporated............................... 160,000
Bear, Stearns & Co. Inc. ........................................ 160,000
BT Alex. Brown Incorporated...................................... 160,000
CIBC Oppenheimer Corp. .......................................... 160,000
Citicorp Securities, Inc. ....................................... 160,000
Dain Rauscher Wessels A division of Dain Rauscher Incorporated... 160,000
Donaldson, Lufkin & Jenrette Securities Corporation.............. 160,000
A.G. Edwards & Sons, Inc. ....................................... 160,000
EVEREN Securities, Inc. ......................................... 160,000
Goldman, Sachs & Co. ............................................ 160,000
Legg Mason Wood Walker, Incorporated............................. 160,000
Piper Jaffray Inc. .............................................. 160,000
Raymond James & Associates, Inc. ................................ 160,000
SG Cowen Securities Corporation.................................. 160,000
Tucker Anthony Incorporated...................................... 160,000
Wheat First Securities, Inc. .................................... 160,000
Advest, Inc. .................................................... 80,000
William Blair & Company, L.L.C. ................................. 80,000
J.C. Bradford & Co. ............................................. 80,000
Craigie Incorporated............................................. 80,000
Crowell, Weedon & Co. ........................................... 80,000
Fahnestock & Co. Inc. ........................................... 80,000
Fidelity Capital Markets A division of National Financial
Services Corp. ................................................. 80,000
Fifth Third/The Ohio Company..................................... 80,000
First Albany Corporation......................................... 80,000
First of Michigan Corporation.................................... 80,000
Gibraltar Securities Co. ........................................ 80,000
Gruntal & Co., L.L.C. ........................................... 80,000
Wayne Hummer Investments LLC..................................... 80,000
Interstate/Johnson Lane Corporation.............................. 80,000
Janney Montgomery Scott Inc. .................................... 80,000
Kirkpatrick, Pettis, Smith, Polian Inc. ......................... 80,000
McDonald & Company Securities, Inc. ............................. 80,000
McGinn, Smith & Co., Inc. ....................................... 80,000
Mesirow Financial, Inc. ......................................... 80,000
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER TRUEPRS
----------- ----------
<S> <C>
Morgan Keegan & Company, Inc. .................................. 80,000
David A. Noyes & Company........................................ 80,000
Parker/Hunter Incorporated...................................... 80,000
The Robinson-Humphrey Company, LLC.............................. 80,000
Roney Capital Markets A division of First Chicago Capital
Markets Inc. .................................................. 80,000
Scott & Stringfellow, Inc. ..................................... 80,000
Stephens Inc. .................................................. 80,000
Stifel, Nicolaus & Company, Incorporated........................ 80,000
Stone & Youngberg............................................... 80,000
Trilon International Inc. ...................................... 80,000
Utendahl Capital Partners, L.P. ................................ 80,000
----------
Total...................................................... 16,000,000
==========
</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 $.50 per
TrUEPrS; provided that such concession for sales of more than 10,000 TrUEPrS
to any single purchaser will be $.30 per TrUEPrS. The Underwriters may allow,
and such dealers may reallow, a discount not in excess of $.40 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 September 23,
1998.
The Trust has granted the Underwriters an option to purchase up to an
additional 2,396,000 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 16,000,000 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 $.7875 per TrUEPrS or $12,600,000 in the aggregate (or
$14,486,850 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 $.50 per TrUEPr and to the extent such sales are made, the
actual amount of Underwriters' Compensation will be less than the aggregate
amounts specified above.
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. The
TrUEPrS have been approved for listing on the NYSE, subject to official notice
of issuance. Trading of the TrUEPrS on the NYSE is expected to commence within
the 30-day period after the Issue Date. The Representatives have advised the
Trust that they
33
<PAGE>
intend to make a market in the TrUEPrS prior to the commencement of trading on
the NYSE. The Representatives will have no obligation to make a market in the
TrUEPrS, however, and may cease market making activities, if commenced, at any
time. In connection with the listing, the Underwriters will undertake that
sales of TrUEPrS will meet the NYSE's minimum distribution standards.
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
34
<PAGE>
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).
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 and liabilities 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.
35
<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
36
<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.
37
<PAGE>
[This page intentionally left blank]
<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>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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.................................................... 19
Risk Factors............................................................... 19
Description of the TrUEPrS................................................. 21
Trustees................................................................... 24
Management Arrangements.................................................... 24
Dividends and Distributions................................................ 26
Net Asset Value............................................................ 27
Taxation................................................................... 27
Underwriting............................................................... 32
Legal Matters.............................................................. 35
Experts.................................................................... 35
Additional Information..................................................... 35
Independent Auditors' Report............................................... 36
Statement of Assets and Liabilities........................................ 37
</TABLE>
Prospectus relating to Preference Shares
of Australia and New Zealand Banking Group Limited
---------------
UNTIL OCTOBER 10, 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 RE-
QUIREMENT 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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
16,000,000 TRUEPRS(SM)
ANZ EXCHANGEABLE
PREFERRED TRUST
---------------
PROSPECTUS
---------------
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY
SEPTEMBER 15, 1998
SM Service mark of Merrill Lynch & Co., Inc.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
