Macquarie Group Declares AUD 1.71 Dividend on Perpetual Capital Notes

Macquarie Group’s Latest Dividend Announcement

Macquarie Group Limited has confirmed an ordinary dividend distribution of AUD 1.7124 per security for its CAP NOTE 3-BBSW+3.70% PERP NON-CUM RED T-09-29. This payment relates to the quarter ending 11 June 2025, with the dividend payable on 12 June 2025. Investors holding these perpetual capital notes will see the ex-dividend date set for 26 May 2025 and the record date on 27 May 2025.

Understanding the Distribution Details

The dividend is partially franked at 35%, reflecting Macquarie’s ongoing commitment to providing tax-effective income streams to investors. The franked portion amounts to AUD 0.59934 per security, while the remaining 65% is unfranked. This split is typical for hybrid securities like these capital notes, balancing corporate tax credits with investor returns.

The distribution rate is calculated using the 90-day Bank Bill Swap Rate (BBSW) as the reference rate, which currently stands at 4.1127%, plus a fixed margin of 3.7%. After adjusting for franking credits and tax considerations, the total annualised distribution rate is 6.7937%. This rate reflects the hybrid nature of the security, blending fixed and variable components to offer a competitive yield in the current interest rate environment.

Implications for Investors and Market Context

For investors, this dividend announcement reinforces the appeal of Macquarie’s capital notes as a source of steady income with a degree of tax efficiency. The 6.79% annualised yield is attractive relative to many fixed income alternatives, especially given the partial franking. However, as these are perpetual notes, investors should remain mindful of the non-cumulative nature of the distributions and the potential for Macquarie to defer payments under certain conditions.

From a market perspective, Macquarie’s dividend declaration aligns with expectations and does not require any extraordinary approvals, signaling stable financial health and confidence in ongoing earnings. The use of the BBSW as a benchmark ties the distribution rate to prevailing market interest rates, which may fluctuate, impacting future dividend amounts.

Looking Ahead

As the payment date approaches, market participants will be watching for any shifts in the BBSW or changes in Macquarie’s financial position that could influence subsequent distributions. The announcement sets a clear baseline for income expectations from these capital notes through mid-2025.