News & Insights



Melbourne, Monday, 30 October 2023 – Australia Ratings has assigned its credit rating of ‘BBB+’ on the forthcoming Australian Unity Bonds (Bonds; ASX code: AYUHE), issued by Australian Unity Limited (AUL). This rating is the highest long-term rating in the intermediate category of creditworthiness on the rating scale of Australia Ratings (see the rating scale below). The Bonds will be unsecured debt obligations of the issuer, AUL. At the same time, Australia Ratings reviewed and affirmed its credit rating of ‘BBB+’ on the existing series of Australian Unity Bonds (ASX codes: AYUHC and AYUHD)

Australia Ratings also assigned and confirmed its product complexity indicator of ‘GREEN’ on the new and existing Bonds respectively, indicating that Australia Ratings considers the Bonds to be a debt investment with simple and straightforward terms and conditions.

“In 2023, Australian Unity had a very good overall result across its diversified portfolio of businesses, which supports the creditworthiness of the group’s Australian Unity Bonds” said Australia Ratings’ credit analyst, Chris Cudsi. Mr Cudsi added, “The Retail, Home Health and Specialist Care businesses all improved earnings, modestly offset by lower earnings in the Wealth and Capital Markets attributable to increased operating expenses”.

AU’s net profit after tax (NPAT) increased to $56.8 million in FY2023, 24% higher than the prior year, though this was significantly driven by the divestment of the group’s dental activities which yielded a $17.8 million pre‑tax profit.

The Australian Unity Group is a diversified organisation specialising in the provision of healthcare (health insurance), financial services, home care and specialist care.

The credit rating reflects the following key strengths of AUL’s business:

  • Robust and competitive private health insurance business that generates around 54% of adjusted EBITDA
  • Prudent risk appetite with regard to maintenance of buffers above regulatory capital requirements
  • Increasing diversification benefits of continued expansion into Home Health, Specialist Care, Wealth and Capital Markets and Australian Unity Bank businesses.

The credit rating also reflects the following key risks to AUL’s business:

  • All of Australian Unity’s businesses operate in areas subject to significant regulatory scrutiny and/or political pressure to minimise price increases.
  • Significant increases in debt in recent years, partly tempered by corresponding substantial increases in the asset base.
  • Exposure to project and construction risks inherent in property development.

The ‘GREEN’ Product Complexity Indicator of the Bonds is confirmed. A GREEN designation indicates the terms and conditions of the Bonds are simple and straightforward with a very low level of complexity on Australia Ratings’ five point Product Complexity Indicator scale.

For more information contact:

Chris Cudsi, Director, 0403 751 040,

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About Australia Ratings
Australia Ratings is Australia’s local credit rating agency with over 60 years of experience in assessing and rating credit risk. Australia Ratings was formed in 2010 following regulatory reforms to the operation of credit rating agencies in Australia. Australia Ratings Pty Limited holds Australia Financial Services License No. 346138.

Opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings, whose members include Jarrod Brown, Chris Dalton, and Mike Dontschuk, oversee the application of Australia Ratings rating methodology and the integrity of the rating process.

Click here to find out more about Australia Ratings’ Credit Rating and Product Complexity Indicator (PCI) Scale.