BOQ Sets Quarterly Capital Note Distribution at AUD 1.3408, Yielding 5.32% Annualised
Bank of Queensland Limited has announced a fully franked quarterly distribution of AUD 1.3408 per Capital Note security, reflecting a stable income stream for investors tied to the 3-month BBSW plus margin.
- Ordinary fully franked distribution of AUD 1.3408 per Capital Note (BOQPF)
- Distribution based on 3-month BBSW plus 3.8% margin, annualised rate 5.3193%
- Payment scheduled for 15 August 2025 with record date 29 July 2025
- Distribution subject to BOQ’s discretion and payment conditions
- No securities plan or external approvals required for this payment
Quarterly Distribution Announcement
Bank of Queensland Limited (ASX: BOQ) has confirmed a quarterly distribution payment of AUD 1.3408 per Capital Note security (ASX code: BOQPF). This distribution is fully franked, meaning it carries a 30% corporate tax credit, which can be advantageous for Australian investors seeking tax-effective income.
The distribution relates to the quarter ending 14 August 2025, with the ex-dividend date set for 28 July 2025 and the record date on 29 July 2025. Payment to security holders is scheduled for 15 August 2025.
Distribution Rate and Calculation
The distribution rate is calculated based on the 3-month Bank Bill Swap Rate (BBSW) plus a margin of 3.8%, as outlined in the Capital Notes 2 Prospectus dated November 2020. For this period, the annualised distribution rate stands at 5.3193%, reflecting the combination of the BBSW and margin adjusted for the corporate tax rate applicable to BOQ’s franking account.
This approach ties the income return to prevailing short-term interest rates, providing a degree of responsiveness to market conditions while maintaining a margin set at issuance through a bookbuild process.
Payment Conditions and Investor Considerations
Importantly, the payment of this distribution remains at the absolute discretion of Bank of Queensland and is subject to specific payment conditions detailed in the Capital Notes 2 Terms. These conditions are designed to ensure the bank’s capital adequacy and financial health are not compromised by distribution payments.
No external approvals such as security holder or court approval are required for this distribution, simplifying the process and providing clarity to investors. Additionally, BOQ does not have a securities plan related to dividends or distributions on these notes, indicating a straightforward payment structure.
Market and Investor Implications
For income-focused investors, this announcement reinforces the steady income potential of BOQ’s Capital Notes, which blend fixed margin returns with variable short-term interest rate exposure. The fully franked nature of the distribution enhances its attractiveness in the Australian tax environment.
However, investors should remain mindful of the discretionary nature of these payments and the underlying payment conditions, which could affect future distributions depending on BOQ’s financial position and regulatory environment.
Bottom Line?
BOQ’s fully franked distribution underscores steady income potential but hinges on discretionary payment conditions.
Questions in the middle?
- Will BOQ maintain its current distribution policy amid changing interest rates?
- How might future regulatory changes impact the payment conditions for Capital Notes?
- What are the implications for investors if BOQ exercises discretion to withhold distributions?
