NAB Convertible Preference Shares

NAB Convertible Preference Shares (NAB CPS) are fully paid preference shares issued directly by NAB, and are listed on the ASX under code NABPA. The issue price for NAB CPS was $100 per NAB CPS. They're not guaranteed or secured: they're not a deposit account or any other account with NAB.

NAB CPS pay a discretionary, quarterly, floating rate, non-cumulative dividend. The dividend rate is equal to the sum of the Bank Bill Rate and a margin of 3.20%. This is adjusted for NAB's Tax Rate1 to reflect franking credits attached to each dividend (subject to availability).2 Dividends are expected to be fully franked.

NAB CPS will mandatorily convert into NAB Ordinary Shares on 22 March 2021, provided certain conditions are met. With the prior written approval of the Australian Prudential Regulation Authority (APRA), NAB may elect to convert, redeem or resell NAB CPS on 20 March 2019, or on the occurrence of particular events, provided certain conditions are met. NAB CPS may also convert in certain circumstances if required by prudential regulatory requirements.

Holders of NAB CPS will have no right to request that NAB CPS be redeemed. Without a conversion, redemption or resale, holders would have to sell their NAB CPS on the ASX at the prevailing market price.

For more information on the NABPA please refer to:

Important information

1 Tax Rate means the Australian corporate tax rate applicable to the franking account of NAB on the relevant dividend payment date, currently 30%.

2 A dividend will only be paid if the directors resolve to pay it and a payment condition does not exist on the dividend payment date.

Note: the above information is not financial advice. Please consult your independent financial adviser if you are considering investing in NABPA.

NAB CPS do not constitute deposit liabilities of NAB. They're not protected accounts for the purposes of the Banking Act 1959 (Cth) or any other accounts. They're not guaranteed or insured by any government, government agency or compensation scheme of the Commonwealth of Australia or any other jurisdiction, by any member of the NAB Group or by any other party.

NAB CPS have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the 'Securities Act'), or the securities laws of any state or other jurisdiction of the United States. They may not be offered, sold or resold in the United States or to, or for the account or benefit of, any "U.S. Person" (as defined in Regulation S under the Securities Act) absent registration or an applicable exemption from the registration requirements.

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