Citigroup Announces AUD 0.26341326 Unfranked Final Distribution for ETHI CitiFirst Self-Funding Instalment MINIs with Reduced Loan Balances

Application of the AUD 0.26341326 Unfranked Distribution to ETHI Self-Funding Instalment MINIs

Citigroup Global Markets Australia Pty Limited, as issuer of CitiFirst Self-Funding Instalment MINIs over the BetaShares Global Sustainability Leaders ETF (ETHI), has confirmed a final unfranked distribution of AUD 0.26341326 per unit. Unlike traditional cash distributions, this amount is automatically applied to reduce the embedded loan balance in accordance with the product’s governing documentation.

Under section 1.1 of the Product Disclosure Statement (PDS), distributions from the underlying ETHI ETF are directed by holders of the Self-Funding Instalments to reduce the outstanding loan amount. This mechanism enables income generated by the underlying asset to progressively pay down the loan, allowing investors to increase their Equity over time without additional cash contributions. The current update formalizes this process for the latest distribution cycle.

Record Date and Ex-Distribution Date Synchronized with ETHI ETF

The record date for entitlement to this distribution is 2 July 2026, coinciding exactly with the record date of the underlying ETHI BetaShares Global Sustainability Leaders ETF, which underpins both ETHSO1 and ETHSO2. This synchronization ensures the instalment MINI products reflect the income events of the ETF they track.

The ex-distribution date for the CitiFirst Self-Funding Instalment MINIs is 1 July 2026, also matching the ETHI ETF’s ex-distribution date. Investors holding ETHSO1 or ETHSO2 positions as of this date will have the distribution applied against their loan balances. Purchasers after this date will not receive this distribution adjustment.

ETHSO1 Loan Balance Reduced from $7.3578 to $7.0961 Post Distribution

Following the application of the AUD 0.26341326 distribution, the outstanding loan amount for ETHSO1 holders has decreased from $7.3578 to $7.0961. This approximately $0.2617 reduction per unit reflects the distribution credited against the loan, consistent with the self-funding structure. Minor differences between the distribution and loan reduction may be due to rounding or administrative procedures outlined in the PDS.

This loan reduction increases the equity portion of the instalment position, as the loan amount decreases while the underlying ETHI ETF value remains stable. The Intrinsic Value of the instalment warrant, representing ownership in the underlying asset, grows accordingly. This progressive equity accumulation is a key investment benefit of self-funding instalments.

ETHSO2 Loan Amount Declines from $10.6603 to $10.3993 After Distribution Credit

ETHSO2 holders will see their loan balance reduced from $10.6603 to $10.3993, a decrease of about $0.2610 per unit, reflecting the same self-funding mechanism. The higher initial loan amount for ETHSO2 compared to ETHSO1 indicates differences in instalment structure or issuance timing, resulting in a larger loan balance despite identical distribution amounts.

Variations in loan amounts between ETHSO1 and ETHSO2 are typical for instalment warrant series issued at different times or with varying initial loan-to-value ratios. Both series track the ETHI BetaShares Global Sustainability Leaders ETF but cater to different investor preferences concerning Leverage and loan exposure. Both benefit proportionally from the distribution through loan reductions.

Implications of the Self-Funding Instalment MINI Structure for ETHI Investors

Self-Funding Instalment MINIs are listed instalment warrants that provide leveraged exposure to an underlying asset—in this case, the BetaShares Global Sustainability Leaders ETF—while using distributions from that asset to automatically reduce an embedded loan. Investors do not need to manually reinvest income, as the distribution is automatically applied per the PDS.

For those seeking leveraged exposure to global ESG-focused equities, ETHSO1 and ETHSO2 offer structured investment options. The ETHI ETF tracks companies recognized for leadership in environmental, social, and governance criteria. The self-funding instalment structure adds leverage, balanced by the presence of an outstanding loan and associated risks.

Distribution Notice Signed by Paul Kedwell, Warrants and Structured Products Manager

The update was signed by Paul Kedwell, Warrants and Structured Products Manager at Citigroup Global Markets Australia Pty Limited, whose team manages a range of structured products including Self-Funding Instalments, Trading Warrants, Turbos, MINIs, and standard Instalments. The notice was formally addressed to the Australian Stock Exchange’s Derivatives Department, consistent with disclosure requirements for listed structured products.

Citigroup Global Markets Australia Pty Limited holds an Australian Financial Services Licence (AFSL number 240992) and operates under ABN 64 003 114 832. The firm participates in both the ASX Group and Cboe Australia, reflecting its active role in Australian listed derivatives and structured product markets. This formal communication highlights the regulatory responsibilities issuers have when declaring distributions on instalment products.

Integration of This Distribution Within the ETHI ETF Income Cycle

The BetaShares Global Sustainability Leaders ETF (ETHI) periodically distributes income to unitholders, triggering corresponding adjustments for holders of CitiFirst Self-Funding Instalment MINIs over the ETF. By aligning record and ex-distribution dates with the ETHI ETF, Citigroup ensures income flows directly reduce loan balances without investor intervention.

This synchronization minimizes timing discrepancies or entitlement issues between ETF distributions and structured product adjustments. Investors should note the updated loan amounts—$7.0961 for ETHSO1 and $10.3993 for ETHSO2—as effective following this distribution. Future ETHI distributions will similarly reduce loan balances if the products remain outstanding and the ETF continues to generate distributable income.

No Cash Distribution—Income Solely Reduces Loan Balances

Importantly, the AUD 0.26341326 distribution does not result in cash payments to ETHSO1 or ETHSO2 holders. Instead, per the PDS, income is applied exclusively to reduce outstanding loans. This key difference distinguishes Self-Funding Instalments from standard income-generating investments, as the yield from the underlying ETF is used to progressively deleverage the position.

Investors expecting periodic cash income should carefully review the PDS to understand this mechanism. The self-funding structure is generally advantageous over a longer Holding Period, as compounding loan reductions lower the break-even cost and increase net equity in the ETHI ETF. However, it means no direct income is received during the product’s life.

Market Impact and Investor Considerations Moving Forward

The immediate market impact of this distribution announcement was not evident from public information. Loan adjustments are mechanical and pre-disclosed features of the product, with distribution amounts aligned to the underlying ETF, thus unlikely to surprise Market Participants familiar with these instruments. The ex-distribution date of 1 July 2026 had already passed when this announcement was released.

Investors holding ETHSO1 and ETHSO2 should note the revised loan balances and monitor upcoming ETHI distribution announcements from BetaShares, as these will trigger further loan reductions. Prospective investors should consult the relevant PDS and consider risks associated with leveraged instalment products, including the impact of declines in the ETHI ETF value on their equity. The next significant event will be the subsequent ETHI distribution, which will prompt the next round of loan adjustments for ETHSO1 and ETHSO2 holders.