IAG Sets 6.04% Annual Yield with December Capital Notes Distribution
Insurance Australia Group Limited has declared a quarterly distribution of AUD 1.5069 per Capital Note, reflecting a 6.04% annualised yield, payable mid-December 2025.
- Quarterly distribution of AUD 1.5069 per IAG Capital Note
- Distribution partly franked at 40%
- Annualised distribution rate of 6.0441%
- Ex-date set for 2 December 2025, payment on 15 December
- No additional approvals required for payment
IAG Announces December Distribution on Capital Notes
Insurance Australia Group Limited (IAG) has confirmed a quarterly distribution payment of AUD 1.5069 per Capital Note (ASX, IAGPE), scheduled for 15 December 2025. This announcement follows the established terms of the IAG Capital Notes 2, reflecting the company’s ongoing commitment to delivering steady income streams to its noteholders.
Distribution Details and Yield Composition
The distribution is partly franked at 40%, with a franked component of AUD 0.6028 and an unfranked portion of AUD 0.9041 per note. The total annualised distribution rate stands at 6.0441%, derived from a reference rate of 3.5802% plus a fixed margin of 3.5%. This rate is consistent with the terms set at the time of the Capital Notes issuance and reflects the prevailing market conditions as of mid-September 2025.
Key Dates and Regulatory Context
The ex-distribution date is 2 December 2025, with the record date following on 3 December. Importantly, no additional approvals from security holders, courts, or regulatory bodies were required to proceed with this distribution, underscoring the routine nature of this payment within IAG’s capital management framework.
Implications for Investors and Market
For investors, the partly franked distribution offers a tax-efficient income component, while the fixed margin provides a degree of yield certainty amid fluctuating interest rates. The steady distribution aligns with IAG’s strategy to maintain investor confidence in its hybrid capital instruments, which play a critical role in the company’s capital structure and regulatory capital adequacy.
Looking ahead, the market will be watching how these distributions influence demand for IAG’s Capital Notes, particularly as interest rate environments evolve and investors seek reliable income sources.
Bottom Line?
IAG’s steady distribution reinforces its hybrid capital appeal but invites scrutiny on future yield sustainability amid market shifts.
Questions in the middle?
- Will IAG maintain or adjust the fixed margin on future Capital Note distributions?
- How might changes in the Australian interest rate environment impact the reference rate component?
- What is the investor appetite for hybrid capital instruments like IAG’s Capital Notes in the current market?