Capital Protector provides investors with a 6 year fixed-term investment that tracks the average quarterly growth in a basket of well known Australian Equity Funds whilst, at the same time, providing protection of the capital invested, if held for the full 6 year term.

Investors in Capital Protector receive an Equity Performance Note ("EPN").

The issuer of Capital Protector is Macquarie Bank Limited.

Investors wishing to invest in Capital Protector are invited to apply for EPN's issued by Macquarie Bank Limited based on the terms outlined in Product Disclosure Statement. The Product Disclosure Statement comprises of two (2) documents; the Master Note Document and the Series Term Sheet.

EPNs are unsecured forward delivery obligations of Macquarie Bank that enable investors to obtain exposure (via the Equity-Linked Return) to an underlying basket of Australian Equity .

Capital Protector provides protection of 100% of the initial capital invested and participation rate of between 100% and 110% of the average quarterly growth in the unit prices of the underlying basket of funds. The participation rate mentioned above is an indication only. The participation rate will be set on 3 November 2003.

An investment in Capital Protector - Series 1 will provide investors with protection of 100% of their initial capital investment provided the investment is held to maturity. Investors may receive less than their initial capital investment in the case of an early redemption.

The Australian Equity funds forming the basis of Series 1 of Capital Protector are:

Investors will receive benefits from exposure to the relevant securities underlying the EPN by way of the Equity-Linked Return.

The Equity-Linked Return is the amount over and above the Protected Note Value that investors receive at Maturity on 30 October 2009.

No. Series 1 of Capital Protector does not provide for the payment of any regular income payments in the form of investment income, interest, dividends, or distributions. Capital Protector is designed as an investment offering the potential for capital gain.

The protection level on Capital Protector is designed to ensure that an investors initial investment is capital protected at maturity.

The Equity-Linked Return will fluctuate during the term of the investment and it may be zero at or before maturity. If the Equity-Linked Return is zero, investors will receive the initial amount invested at maturity.

Fluctuations in the Equity-Linked Return may occur during the term of the investment due to market factors affecting the underlying basket of funds such as changes in price, volatility, interest rates, dividends or distributions (forecast and actual) and remaining term to maturity.

Investors are able to redeem their investment in Capital Protector before maturity but the protection of the initial capital invested will not apply. Any early redemption by an Investor will be subject to the discretion of, and on terms offered by, Macquarie Bank.

Investors should not invest in Capital Protector if they believe they may require access to their funds prior to maturity.

Capital Protector allows investors to gain exposure to the average quarterly growth in the unit prices of the underlying basket of funds, with the security of capital protection.

An investment in Capital Protector is a “set and forget” investment providing the opportunity for capital growth over a fixed term. Capital Protector has low administration and ongoing maintenance and involves no bank fees or management fees.

No.

Capital Protector gives investors exposure to the average quarterly growth in the unit prices of the underlying basket of Australian Equity funds. Investors do not have a legal or beneficial interest in the basket of funds.

The value of forecast dividends or distributions is priced into Capital Protector on the date the EPNs are issued. This gives investors exposure to the forecast dividends or distributions via the Participation Rate in the performance of the underlying basket of funds. Changes to actual and forecast dividends or distributions may affect the value of Capital Protector during the term of the investment.

If an investor holds their investment in Capital Protector until maturity and the investor selects the cash payment option, the investor should receive concessional capital-gains tax treatment on any gains made during the term.

Should an investor decide to take delivery of the securities, in lieu of the cash payment option, at maturity, investors should not be required to pay capital gains tax at that time. Capital gains tax should only be payable when the securities are ultimately dispose of.

No – there is no cooling off period for this investment.

Both an up-front and trail commissions are payable to licensed securities dealers who place investments in Capital Protector on behalf of investors.

The rate of initial commission is 2%, whilst the rate of trail commission is 0.3% per annum. These rates may be grossed up for GST.

Macquarie has established a complaints handling and dispute resolution process. Refer to section 7.2 of the Master Note Document for details.

The Product Disclosure Statement provides full information on Capital Protector. Investors should read the Product Disclosure Statement prior to investing.

Additional information can be obtained from Macquarie Bank on (02) 9223 2882

To apply, investors must complete and return the Application Form attached to the Series Term Sheet. Applications, with application monies, must be received by Macquarie Bank by close of business on 31 October 2003.