ANZ Declares AUD 1.3062 Distribution on Capital Note AN3PL, 70% Franked
Australia and New Zealand Banking Group Limited (ANZ) has announced a quarterly distribution of AUD 1.3062 per security on its capital note AN3PL, with a 70% franking rate and payment scheduled for September 22, 2025.
- Quarterly distribution of AUD 1.3062 per AN3PL security
- Distribution is 70% franked, reflecting partial corporate tax credits
- Payment date set for 22 September 2025, with ex-date on 9 September
- Distribution rate based on 3-month BBSW plus 2.90% margin, adjusted for tax
- No withholding tax on unfranked component for non-resident holders
ANZ Announces Quarterly Distribution on Capital Notes
Australia and New Zealand Banking Group Limited (ANZ) has declared a quarterly ordinary distribution of AUD 1.3062 per security on its capital note AN3PL, also known as CAP NOTE 3-BBSW+2.90% PERP NON-CUM RED T-03-31. This payment is scheduled for 22 September 2025, with the ex-date and record date set for 9 and 10 September respectively.
Distribution Details and Tax Implications
The distribution is 70% franked, meaning that a significant portion of the payment carries a corporate tax credit at the prevailing 30% tax rate. The franked amount per security is AUD 0.91434, while the unfranked portion is sourced from ANZ's conduit foreign income account, which exempts non-resident holders from withholding tax on this component. Australian resident investors are advised to provide their Tax File Number or Australian Business Number to ANZ's share registrar to avoid withholding tax on the unfranked portion.
Calculation of the Distribution Rate
The distribution rate for this period is calculated based on the 3-month Bank Bill Swap Rate (BBSW) plus a margin of 2.90%, adjusted for corporate tax and franking. The total annualised distribution rate stands at 4.6155%, reflecting the bank's approach to balancing investor returns with regulatory capital requirements. The distribution amount reflects a 94-day payment period ending 21 September 2025.
Conditions and Investor Considerations
It is worth noting that the distribution payment remains subject to ANZ's absolute discretion and the absence of any payment conditions on the distribution payment date. These conditions are standard for every quarterly distribution on this capital note. Investors should also be aware that there is no securities plan related to dividends or distributions on this security, and no external approvals are required for this payment.
Looking Ahead
This announcement underscores ANZ's ongoing commitment to managing its capital instruments prudently while delivering steady income streams to investors. The partial franking and tax treatment highlight the bank's navigation of complex tax and regulatory environments, which will continue to be a focal point for income-focused investors in hybrid securities.
Bottom Line?
ANZ’s latest distribution reflects steady income delivery amid evolving capital and tax considerations, setting the stage for investor scrutiny ahead of the September payment.
Questions in the middle?
- Will ANZ maintain or adjust the distribution margin in future periods amid changing interest rates?
- How might changes in tax legislation impact the franking and withholding tax treatment of future distributions?
- What are the implications if ANZ exercises its discretion to withhold or reduce distributions under adverse conditions?
