BOQ’s Capital Notes 3 Distribution Hinges on Discretion and Conditions
Bank of Queensland Limited announces a fully franked quarterly distribution of AUD 1.2182 per Capital Note 3 security, reflecting a 4.89% annualised yield tied to the 3-month BBSW plus margin.
- AUD 1.2182 per security quarterly distribution
- Fully franked at 30% corporate tax rate
- Distribution rate annualised at 4.8861%
- Payment subject to BOQ’s discretion and conditions
- Ex-date 27 November 2025, payment on 15 December 2025
Distribution Announcement Overview
Bank of Queensland Limited (BOQ) has declared an ordinary quarterly distribution of AUD 1.2182 per Capital Note 3 security (ASX – BOQPG). This payment is fully franked, meaning it carries a 30% corporate tax credit, which is a significant benefit for Australian investors seeking tax-effective income streams.
The distribution relates to the period ending 14 December 2025, with an ex-date set for 27 November 2025 and a record date of 28 November 2025. Payment is scheduled for 15 December 2025, consistent with the terms outlined in the Capital Notes 3 Prospectus issued in November 2022.
Calculation and Rate Details
The distribution rate is derived from the 3-month Bank Bill Swap Rate (BBSW) plus a margin of 3.40%, resulting in an annualised rate of approximately 4.8861%. This rate reflects the cost of capital for BOQ and aligns with market expectations for hybrid securities of this nature. The calculation methodology incorporates a tax adjustment factor, ensuring the distribution is fully franked.
Investors should note that the distribution is subject to BOQ’s absolute discretion and the satisfaction of specific payment conditions as stipulated in the Capital Notes 3 terms. These conditions are designed to protect the bank’s capital position and ensure regulatory compliance.
Implications for Investors and Market
For income-focused investors, the fully franked nature of the distribution enhances after-tax returns, particularly for Australian taxpayers eligible to utilise franking credits. The stable quarterly payment schedule and transparent calculation method provide predictability in income streams.
From a broader perspective, this announcement underscores BOQ’s ongoing commitment to prudent capital management and maintaining investor confidence in its hybrid securities. However, the discretionary nature of the payment means investors should remain attentive to any future updates regarding payment conditions or changes in distribution policy.
Bottom Line?
BOQ’s fully franked distribution signals steady income for investors but hinges on ongoing payment conditions.
Questions in the middle?
- Will BOQ maintain this distribution rate amid changing interest rate environments?
- How might future regulatory changes impact the payment conditions for Capital Notes 3?
- What are the implications if BOQ exercises discretion to withhold distributions?
