Bank of Queensland : Amendments to BOQ CPS Terms

ASX RELEASE

Bank of Queensland Limited ABN 32 009 656 740

100 Skyring Terrace, Newstead QLD 4006

GPO Box 898, Brisbane QLD 4001

Telephone (07) 3212 3333

Facsimile (07) 3212 3409

www.boq.com.au

22 November 2017

BOQ today announced that it has amended the terms of the convertible preference shares issued by BOQ in December 2012 (CPS). The amendments have been made to facilitate the Reinvestment Offer under which Eligible CPS Holders may apply to reinvest some or all of their CPS in Capital Notes.

The buy-back of CPS under the Reinvestment Offer is subject to approval by Ordinary Securityholders to be proposed at the BOQ Annual General Meeting on 30 November 2017. The Reinvestment Offer will not proceed unless this approval is obtained, in which case all Eligible CPS Holders will continue to hold their CPS, subject to the CPS Terms.

Specifically, the changes permit the payment of a Pro-Rata Dividend to holders of Reinvestment CPS. The Pro-Rata Dividend will be paid on the Reinvestment Date, which is expected to be 28 December 2017, subject to the payment tests in the CPS Terms.

Full details of the Offer (including the Reinvestment Offer and the Pro-Rata Dividend) are set out in the Prospectus that was lodged today with the Australian Securities and Investments Commission and Australian Securities Exchange.

The amendments to the CPS terms are highlighted in the attachment and take effect from today. The amendments have been approved by the Australian Prudential Regulation Authority. Defined terms referred to in this announcement have the meaning given to them in the Prospectus.

For more information contact:

Disclaimer

This announcement does not constitute an offer of any securities (including Capital Notes or CPS) for sale or issue. No action has been taken to register or qualify Capital Notes or the Offer or to otherwise permit a public offering of Capital Notes outside Australia. In particular, this announcement does not constitute an offer of securities for sale in the United States. Neither the Capital Notes nor the Ordinary Shares have been or will be registered under the US Securities Act or the securities laws of any state of the United States, and they may not be offered or sold in the United States or to, or for the account or benefit of, a US Person.

1. Description

   The following are the terms and conditions of fully-paid, unsecured, perpetual preference shares, paying discretionary, floating rate non-cumulative dividends (the BOQ CPS). The BOQ CPS may be Converted, Redeemed or Transferred according to these Terms of Issue.

2. Issuer

   The BOQ CPS will be issued by Bank of Queensland Limited ABN 32 009 656 740 (Bank) under the Constitution and on the terms and conditions set out in these Terms of Issue.

3. Denomination

   The denomination of each BOQ CPS will be the Face Value. Each BOQ CPS will be issued as fully paid.

4. Face Value

   The Face Value of each BOQ CPS will be $100.

5. Maturity

   The BOQ CPS are perpetual and have no maturity date.

6. Dividends
7. Calculation

   Subject to these Terms of Issue, the BOQ CPS will pay a cash dividend on each relevant Dividend Payment Date (each a Dividend). The Dividend is calculated as:

   Dividend = Dividend Rate x Face Value x D

   365

   where:

   D is the number of days in the period from (and including):

8. for the first Dividend Payment Date, the Issue Date until (but not including) the first Dividend Payment Date; and

9. for any subsequent Dividend Payment Date, the preceding Dividend Payment Date until (but not including) the relevant Dividend Payment Date,

   (each such period a Dividend Period);

   Dividend Rate has the meaning given in clause 6.2; Face Value has the meaning given in clause 4.
10. Dividend Rate

    The Dividend Rate (expressed as a percentage rate per annum) is:

    BBR

    • Margin  1 t

    where:

    BBR means the Bank Bill Swap Rate (expressed as a percentage per annum) on the first Business Day of the Dividend Period; Margin means the margin (expressed as a percentage per annum) determined under the Bookbuild; t is the Australian corporate tax rate applicable to the franking account of the Bank at the relevant Dividend Payment Date, expressed as a decimal.
11. Gross-up for partly franked dividends

    If any Dividend is not franked to 100% under Part 3-6 of the Tax Act (or any provisions that revise or replace that Part), the Dividend will be adjusted in accordance with the following formula:

    Dividend  d

    1 t  1 f 

    where:

    d - is the Dividend calculated under clause 6.1; t - has the meaning given in clause 6.2; and f - is the franking percentage (within the meaning of Part 3-6 of the Tax Act or any provisions that revise or replace that Part) applicable to the franking account of the Bank at the relevant Dividend Payment Date, expressed as a decimal.
12. Dividend Payment Date

    Dividends will be payable on the BOQ CPS in arrears on each Dividend Payment Date, with the first Dividend Payment Date being on 15 April 2013 and thereafter semi-annually on each 15 April and 15 October until the BOQ CPS are Converted or Redeemed (in which case the Conversion Date or Redemption Date or in the case of the Reinvestment BOQ CPS the Reinvestment Date, as the case may be, will be the final Dividend Payment Date). In the event that BOQ CPS are Transferred, the Transfer Date will be a Dividend Payment Date for those BOQ CPS (but will not be the final Dividend Payment Date for those BOQ CPS).

13. Non-cumulative

14. Dividends are non-cumulative. If all or any part of a Dividend is not paid because of the provisions of these Terms of Issue or because of any applicable law, the Bank will have no liability to pay, and the Holders will have no right to be paid, any amount in respect of that Dividend.

15. The Holders will have no claim or entitlement (including without limitation on winding up of the Bank) in respect of such non-payment, and such non-payment will not constitute an event of default or give Holders any right to apply for the

    winding-up or administration of the Bank, or cause a receiver, or receiver and manager, to be appointed in respect of the Bank.

16. No interest accrues on any unpaid Dividend and the Holder has no claim or entitlement in respect of interest on any unpaid Dividend.

17. Conditions to dividend payments

    The payment of a Dividend (including on Conversion, Redemption or Transfer) is subject to:

18. the Directors, in their absolute discretion, determining that the Dividend is payable;

19. the Bank being lawfully able to pay the Dividend under the Corporations Act;

20. payment of the Dividend not resulting in any breach of APRA's then prevailing capital adequacy standards and guidelines as they are applied to the Group at the time, unless otherwise approved by APRA; and

21. APRA not otherwise objecting to the payment on the relevant Dividend Payment Date.

    Without limiting clause 6.6(a), the Directors will not determine a Dividend to be payable if, in their opinion, making the payment would result in the Bank becoming, or being likely to become, insolvent for the purposes of the Corporations Act.

22. Record date for Dividends

    A Dividend (other than a Dividend payable in respect of Reinvestment BOQ CPS on the Reinvestment Date) is only payable to those persons registered as Holders on the date which is 11 Business Days before the Dividend Payment Date for that Dividend, or such other date as may be required by the ASX from time to time and adopted by the Bank.

    A Dividend payable in respect of Reinvestment BOQ CPS on the Reinvestment Date is only payable to those persons registered as Holders on the date falling prior to the Reinvestment Date which is determined by the Directors to be the record date for that Dividend.

23. Deductions

    The Bank may deduct or withhold from any Dividend or amount payable on Redemption (or upon or with respect to the issuance of any Ordinary Shares upon any Conversion), the amount of any withholding or other tax, duty, assessment, levy, government charge or other amount, as required by applicable law or any agreement with a governmental authority. If any such deduction or withholding has been made and paid over or accounted for by the Bank to the relevant governmental authority and the balance of the Dividend or other amount payable has been paid (or, in the case of a Conversion, Ordinary Shares have been issued) to the Holder concerned, then the full amount payable to such Holder (or, in the case of a Conversion, the Conversion Number of Ordinary Shares) will be taken to have been duly paid and satisfied (or, in the case of a Conversion, issued) by the Bank. The Bank shall pay the full amount required to be deducted or withheld to the relevant governmental authority within the time allowed for such payment without incurring any penalty under applicable law and must, if requested by the relevant Holder, deliver to that Holder confirmation of that payment without delay after it is received by the Bank from the relevant governmental authority.

24. Means of payment

25. The Bank may pay a person entitled to any Dividend or other moneys payable in respect of a BOQ CPS by: