Ramsay Health Care Sets AUD 3.3608 Distribution for Perpetual Preference Shares

Preferred Security Distribution Announced

Ramsay Health Care Limited (ASX:RHC) has declared a distribution of AUD 3.3608 per security for its TRANS PREF 6-BBSW+ 4.85% PERP SUB RED T-10-10 preference shares. This payment, covering the six-month period ending 19 October 2026, is fully franked at the prevailing 30% corporate tax rate, signalling tax efficiency for investors.

The distribution is scheduled with an ex-date of 29 September 2026, a record date of 30 September 2026, and a payment date set for 20 October 2026. However, actual payment remains contingent on the Ramsay board resolving to approve the distribution by 25 August 2026 according to terms outlined in the company's 2005 CARES prospectus.

Calculation of Distribution Rate

The distribution rate is anchored to the 180-day Bank Bill Swap Rate (BBSW) observed on 20 April 2026, the first day of the dividend period, plus a margin of 4.85%. This methodology results in a total annualised rate of 6.7032%, factoring in the corporate tax adjustment. Notably, the margin applied is the stepped-up rate announced back in August 2010, reflecting the security’s established terms.

This approach to rate setting aligns with the structure of Ramsay’s perpetual subordinated convertible adjustable rate equity securities, which have been a part of the company’s capital strategy for over a decade. The fully franked nature of the distribution enhances its appeal, especially for Australian tax-resident investors.

Investor Implications and Upcoming Catalysts

Investors holding these preference securities should note the conditionality of the payment on the board’s approval later this year, introducing an element of uncertainty. This follows Ramsay’s recent strong financial performance, including a 253% profit surge and strategic expansion moves such as the acquisition of National Capital Private Hospital, which may influence capital allocation decisions.

Indeed, Ramsay’s ongoing corporate developments, including the planned spin-off of Ramsay Santé and recent regulatory clearances, suggest a dynamic backdrop for the group’s capital management. The distribution announcement sits alongside these strategic shifts, potentially impacting investor sentiment and pricing for the preference securities.

Given the complexity and historical terms tied to these securities, investors would benefit from reviewing the original 2005 CARES prospectus for a comprehensive understanding of rights and conditions. The upcoming board decision in August will be a critical event to monitor for confirmation of this distribution.