IAG’s Capital Notes Dividend Signals Stable Capital Management Amid Market Uncertainty

IAG's Capital Notes Dividend Announcement

Insurance Australia Group Limited (IAG) has confirmed an ordinary dividend distribution of AUD 1.6241 per security for its Capital Notes 3-BBSW+3.50% Perpetual Non-Cumulative Redeemable securities. This dividend relates to the quarter ending 15 March 2026 and will be paid on 16 March 2026.

The distribution is partly franked at 25%, meaning a portion of the dividend carries a tax credit reflecting corporate tax already paid by IAG. This partial franking is consistent with the company’s approach to balancing shareholder returns with tax efficiency.

Understanding the Distribution Rate

The total distribution rate for this period stands at 6.5141% per annum. This rate is derived from the 3-month Bank Bill Swap Rate (BBSW) of 3.7120% plus a fixed margin of 3.5%, adjusted for franking credits. The margin was set at the time of the Capital Notes issuance and remains unchanged, providing investors with a predictable income stream.

This dividend payment reflects IAG’s ongoing capital management strategy, leveraging hybrid securities to balance funding costs and shareholder returns. The perpetual, non-cumulative nature of these notes means dividends are paid at the company’s discretion but have historically been maintained to support investor confidence.

No Surprises in Approvals or Terms

Importantly, no new approvals from security holders, courts, or regulatory bodies were required for this dividend distribution. This smooth process underscores the stability of IAG’s capital structure and the clarity of terms set out in the Capital Notes 2 and 3 documentation.

Investors can expect the dividend to be paid in Australian dollars, with no alternative currency arrangements or securities plans affecting this payment. The announcement aligns with prior communications and market expectations, reinforcing IAG’s commitment to transparent and consistent shareholder returns.