On the 16th of August 2016 Australian and New Zealand Banking Corporation (ANZ) announced a new transaction, ANZ Capital Notes 4 (Prospective ASX Code: ANZPG).   The purpose of this transaction is to provide Regulatory Capital for the group but more specifically it will be treated as additional Tier 1 capital for regulatory purposes. The indicative size of the offer is $1 billion but ANZ retain the ability to change the issue size.   ANZ is offering existing holders of ANZ Convertible Preference Shares 2 (ASX Code: ANZPA) the opportunity to reinvest their capital into this new security through the reinvestment offer but it is also open to new investors.   Click here to access the Research Report.   Since the ANZ Capital Notes 4 deal was announced on 16th August the Australian major banks hybrid curve has rallied as the trading margin of hybrids with a term of less than 5 years have being sought after.   Figure 1. Tier 1 Capital Note Curve anzpg Source: BondAdviser