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: