As you may know, Laminar Capital is a leading originator of capital solutions for regional and mutual ADIs. We have been involved with over 50 individual issues in our time in the market and were the first capital markets participant to bring a regional ADI to market with a fully complaint Basel III tier 2 issue. That successful deal was placed on behalf of Auswide Bank in June 2014.

We have been working closely with other issuers over the last 12 months and are well progressed with bringing the next deal to market in the next 6-8 weeks. Anyone that has been involved with looking at alternative ways to raise capital may have become aware of the need to receive an independent tax opinion on the tax deductibility of the interest payments associated with an issue that either converts to equity, MEIs or is fully written of at the point of non-viability. Laminar Capital is well advanced on this work having spent the last 9 months in dialogue with the ATO.

What we can report through our work with the tax office is that any issuer that wants to issue additional tier 1 or tier 2 with conversion to MEI, and have the interest payments classified as tax deductible, is unlikely to receive a positive outcome from a binding private ruling at this stage. This means that any interest paid will unlikely receive tax deductibility status, therefore adding significant cost to the issue.

What we have been successful in achieving is a private ruling on an issue that goes straight to write-off at the point of non-viability. You may have also seen that Heritage Bank recently placed a tier 2 deal that went straight to write-off AND received 100% recognition of that issue as regulatory capital. Up until now it has been APRA’s stance that any issue that goes straight to write-off must take any tax deductibility of the write down into consideration at the point of issue. This translated into a situation where only 70% of an issue could be counted towards regulatory capital.

Laminar Capital is also well progressed on a Basel III complaint additional tier 1 structure that takes our experience into account and can provide mutual ADIs with a cost effective tier 1 solution.

What sets Laminar Capital apart is our ability to structure a deal from documentation through to actual sale and execution without the cost of having to engage additional advisors or intermediaries. We have a proven track record in delivering structures that achieve their objectives in a cost effective manner. We are able to provide documentation for either a wholesale tier 2 or retail tier 1 issue and our work with the ATO means that we can get issuers to market without having to pay ongoing advisory fees.

If you are interested in finding out more information about Laminar Capital’s solutions please do not hesitate to give us a call on 03 9001 6991