National Income Securities (NIS) were a form of ASX-listed hybrid income security. They were not ordinary shares or bank deposits.
NIS consisted of two components:
- A fully paid debt security of $100 (Note).
- An unpaid preference share (or Preference Share).
These two components were stapled together and could not be traded separately.
On 11 January 2021, NAB issued an Exchange Notice in respect of the NIS, confirming that on Monday, 15 February 2021, all NIS on issue would be repaid.
On 15 February 2021, holders of NIS received cash proceeds of $100 per NIS, plus the final interest payment on the Note. The Preference Shares forming part of the NIS were bought back for no consideration and cancelled.
The last date for trading in NIS was 27 January 2021 and the Record Date for the final payment was 29 January 2021.
Floating distribution rate
NIS offered a floating distribution rate, payable quarterly in arrears. The distribution rate varied every quarter at the defined market rate plus 1.25% per annum.
The defined market rate was the 90 Day Bank Bill Rate.
Under Australian tax law, the NIS distributions represented non-share dividends which were unfrankable.
For Australian resident holders, the distributions received will form part of your Australian assessable income. Franking credits could not be attached to the NIS distributions made. For tax return purposes the NIS distributions should therefore be disclosed as unfranked dividends.
For non-resident holders, the NIS distributions received generally won’t be subject to Australian tax. No Australian withholding tax was deducted from your NIS distributions due to a specific withholding tax exemption applicable to certain non-share dividends.
- NIS payments history
- National Income Securities Prospectus (PDF, 457 KB)
- Exchange Notice in respect of National Income Securities (PDF, 178KB)
Note: the above information is general in nature and is not, nor is it intended to be read as, financial or tax advice. Please consult your independent financial or tax adviser if you have questions regarding your investment in NIS.