The issuance is of. $750 million AUD-denominated wholesale 3-year notes, split between $500 million floating rate notes and $250 million fixed rate notes. The interest rate payable to noteholders is 3 months BBSW with an additional margin of 1.12 per cent per annum on the floating rate tranche and 5.57 per cent per annum on the fixed rate tranche.
According to Challenger, this is a response for the demand for new income solutions, which has been reflected in the transaction being significantly oversubscribed with a final order book in excess of $1.75 billion.
“Representing the first-of-its-kind solution in the Australian market, the CABN program establishes a new market channel for Challenger as it enters its next phase of growth,” the company said.
“It follows the development and ASX listing of unique-to-market LiFTS Notes in August 2025 and builds on Challenger’s experience in providing innovative solutions to institutional investors.”
Challenger managing director and chief executive Nick Hamilton said the launch of the new program is a significant milestone for the business as it enters its next era of growth.
“The notes support the growth of our annuity book, expand our customer channels, and add further diversification to our range of income solutions,” he said.
“We are delighted with the strong interest received from a range of quality institutional investors in the Notes, which are the first of their kind in the Australian market.
“CABN provides us with a flexible platform that we can continue to evolve, including across different tenors, enabling us to support asset origination and deepen our funding capabilities over time.”
The launch comes as Challenger continues to double down on its retirement income strategy, with its Life business increasingly offsetting weakness in its funds management division.
In its FY25 results, the firm reported record total Life sales of $8.6 billion, driven by strong demand for guaranteed retirement income products, including record retail lifetime annuity sales and strong Japanese annuity sales.
While its funds management business recorded $11.6 billion in net outflows, Challenger said the continued growth of its annuity book demonstrated increasing demand for lifetime income solutions as more Australians enter retirement.
