Challenger unveils new suite of annuity-backed notes

Yasmine Raso

Senior Journalist

6 July 2026

In the effort to diversify its offering and building off the successful launch of its “unique-to-market” ASX-listed LiFTS Notes just under a year ago, Challenger has announced the first issuance of a new annuity-backed notes program.

The $6 billion Challenger Annuity-Backed Notes (CABN) program has marked its inaugural issuance of $750 million AUD-denominated wholesale 3-year notes, divided into $500 million in floating rate notes and $250 million in fixed rate notes.

The notes, which have already been allocated an A+ long-term issue rating by S&P Global, will help boost annuity growth for Challenger and come amid surging demand for diverse income solutions, with the firm confirming in a statement that the transaction boasts a “final order book in excess of $1.75 billion”.

“The launch of our annuity-backed notes program is a significant milestone for our business as we enter our 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,” Challenger’s Managing Director and Chief Executive Officer, Nick Hamilton, 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.”

Yet another “first-of-its-kind” solution brought to market by Challenger, the firm said the launch marks its next phase of growth. The interest rate payable to noteholders is 3 months BBSW plus a margin of 1.12% per annum on the floating rate tranche and 5.57% per annum on the fixed rate tranche.