Westpac Banking has launched a $750 million offer of hybrid securities, or capital notes, to retail investors, marking the third hybrid capital raising by a big four bank so far in 2015.

The offer, flagged by The Australian Financial Review's Street Talk, is seeking to raise about $750 million and will pay a margin of between 4 to 4.20 percentage points over the bank rate – or about 6.15 to 6.35 per cent. This margin would be the highest rate paid by a large bank for hybrid capital since the financial crisis, surpassing the 3.80 percentage point margin paid by the Commonwealth Bank in late 2012.

Westpac's raising comes as the hybrid market recovers from a sharp correction following CBA's $3 billion PERLS VII raising in the third quarter of 2014. Credit:Mayu Kanamori

The notes can be redeemed in 5.5 years, in March 2021, and are scheduled to convert to shares in March 2023, if they are not converted.

The securities will be eligible to count as Tier I capital under new Basel III regulation because they include terms that force conversion into shares if the bank's common equity position is depleted to less than 5.125 per cent, or if the prudential regulator deems the institution to be non-viable.