Final Unfranked Distribution of AUD 0.29472183 Announced for CitiFirst Self-Funding Instalment MINI on ILC iShares S&P/ASX 20 ETF

Impact of the AUD 0.29472183 Unfranked Distribution on ILCSO1 and ILCSO3 Loan Balances

This update centers on the declaration of a final unfranked distribution of AUD 0.29472183 applicable to both ILCSO1 and ILCSO3 CitiFirst Self-Funding Instalment MINI warrant series. Under the Self-Funding Instalment structure, distributions from the underlying ETF are not paid out as cash to holders. Instead, per section 1.1 of the Product Disclosure Statement (PDS), these distributions are automatically applied to reduce the outstanding loan balance attached to each instalment product.

For ILCSO1, the loan balance has decreased from $14.7858 to $14.4945 following this distribution. Similarly, ILCSO3’s loan balance has been reduced from $11.7042 to $11.4123. These reductions reflect the direct application of the underlying ETF’s distribution to the instalment structure, thereby increasing the holder’s Equity in the underlying asset over time without requiring additional cash payments.

Synchronization of Record and Ex-Distribution Dates with the ILC iShares S&P/ASX 20 ETF

Citigroup Global Markets Australia has confirmed that the record date for entitlement to this distribution is 2 July 2026, with the ex-distribution date on 1 July 2026. Both dates align exactly with the corresponding dates for the underlying ILC iShares S&P/ASX 20 ETF. This synchronization is a key feature of Self-Funding Instalment MINIs, designed to closely mirror the dividend events of the underlying security.

This alignment ensures that instalment holders experience timing consistent with direct ETF investors, although the economic treatment differs—warrant holders receive a loan reduction instead of a cash payment. Holders uncertain about entitlement or ex-distribution details should consult the relevant PDS or seek independent financial advice.

Understanding the Self-Funding Instalment MINI Structure for ILC Warrant Holders

The Self-Funding Instalment MINI is a leveraged structured product issued by Citigroup Global Markets Australia, allowing investors to gain leveraged exposure to an underlying asset—in this case, the ILC iShares S&P/ASX 20 ETF—by paying only part of the purchase price upfront, with the remainder financed through a loan from the issuer. The loan balance represents the deferred portion of the Investment cost.

The "self-funding" aspect refers to the use of distributions from the underlying asset to reduce the outstanding loan, thereby lowering the holder’s Leverage over time without additional cash input. This structure suits investors seeking leveraged equity exposure while benefiting from the income characteristics of the underlying ETF. As the loan balance declines, the holder’s equity in the underlying asset increases, assuming all other factors remain constant.

Loan Balance Adjustment for ILCSO1: From $14.7858 to $14.4945

Specifically for ILCSO1 holders, the loan balance has decreased from $14.7858 to $14.4945 due to the application of the AUD 0.29472183 distribution. This reduction of approximately $0.2913 per warrant unit aligns with the declared distribution amount after any applicable adjustments per the PDS. Holders should update their records accordingly, as this change affects equity calculations and future break-even or exit price assessments.

A reduced loan balance effectively lowers the exercise price—the amount required to convert the instalment into full ownership of the underlying ETF units. Over multiple distribution cycles, this progressive loan reduction can significantly influence the risk and return profile of the warrant position. Investors should incorporate the new loan amount of $14.4945 into portfolio valuations and risk analyses.

Loan Balance Adjustment for ILCSO3: From $11.7042 to $11.4123

ILCSO3 holders have experienced a similar loan balance reduction from $11.7042 to $11.4123 following the same distribution event. The lower initial loan balance compared to ILCSO1 reflects a different series with distinct terms, possibly due to a different issuance date or entry point within the CitiFirst product range. Both series, however, have been updated in line with the AUD 0.29472183 distribution.

While the absolute loan reduction is comparable between ILCSO1 and ILCSO3, the percentage decrease in leverage differs due to their starting loan balances. ILCSO3 holders should use the updated loan amount of $11.4123 when assessing their instalment positions.

Citigroup Global Markets Australia’s Role as CitiFirst Structured Products Issuer

The announcement was signed by Paul Kedwell, Warrants and Structured Products Manager at Citigroup Global Markets Australia Pty Limited, an entity licensed under Australian Financial Services Licence (AFSL 240992) and a participant of the ASX Group and Cboe Australia. Citigroup Global Markets Australia issues the CitiFirst product range, which includes Self-Funding Instalments, trading warrants, turbos, MINIs, and instalments across various underlying securities and indices.

As issuer, Citigroup Global Markets Australia manages distribution events, updates loan balances, and communicates relevant changes to the market and warrant holders through formal regulatory disclosures. The update lodged on 2 July 2026 is a routine but important notification ensuring accurate and timely information regarding updated loan amounts for ILCSO1 and ILCSO3 following the distribution record date.

Tax Implications of the Unfranked Distribution for Australian Residents

The declared distribution of AUD 0.29472183 is unfranked. For Australian tax residents holding instalment warrants, the franking status of distributions from underlying securities affects the after-tax value. Franked distributions include franking credits reflecting company tax already paid, which can offset the holder’s personal tax Liability. Unfranked distributions carry no such credits.

Since this distribution is applied directly to reduce the loan balance rather than paid in cash, the immediate tax treatment may differ from that of direct ETF holdings. The company did not provide specific tax guidance in this update. Holders are advised to consult registered tax professionals or financial planners regarding the tax consequences of holding CitiFirst Self-Funding Instalment MINI products and receiving loan-reducing distributions.

ILC iShares S&P/ASX 20 ETF as the Underlying Asset for ILCSO1 and ILCSO3

Both ILCSO1 and ILCSO3 reference the ILC iShares S&P/ASX 20 ETF, managed by BlackRock and listed on the ASX. This ETF tracks the S&P/ASX 20 index, which includes the twenty largest companies on the Australian Securities Exchange by Market Capitalisation. The index features major Australian Blue-Chip companies across banking, Mining, and resources sectors, representing a concentrated large-cap Australian equity benchmark.

Because the CitiFirst Self-Funding Instalment MINIs derive value from the ILC ETF’s unit price movements and benefit from its periodic distributions via loan reductions, holders are exposed to the performance of Australia’s largest listed companies. Significant changes in the S&P/ASX 20 Index—driven by macroeconomic factors, Commodity price fluctuations, or individual blue-chip Earnings—will affect the value of these instalment warrants. Investors should closely monitor the performance and distribution schedule of the underlying ILC iShares S&P/ASX 20 ETF.

Next Steps for Instalment Warrant Holders After This Distribution

Following this distribution, holders of ILCSO1 and ILCSO3 should update their records to reflect the new loan balances of $14.4945 and $11.4123 respectively. These figures are crucial for mark-to-market valuations, portfolio reporting, and decisions regarding holding, exercising, or selling the instalment warrants. This announcement confirms these loan amounts as final for this distribution event.

Looking forward, the next important event for ILCSO1 and ILCSO3 holders will be any future distributions declared by the ILC iShares S&P/ASX 20 ETF, which would trigger additional loan balance reductions under the self-funding mechanism. Investors should also stay alert to any changes in warrant terms, loan interest rates, or Maturity dates announced by Citigroup Global Markets Australia through regulatory disclosures. The immediate share price impact of this update is unclear, as it pertains to structured warrant products rather than direct equity securities.