12 Sep – 16 Sep 2016

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ASX-listed hybrids

This week the median trading margin for hybrids rose 5bps to 4.05%. Hybrids which had the largest trading margin rise include Bendigo Bank CPS 2 (+34bps, ASX code: BENPD), Westpac Capital Notes (+31bps, ASX code: WBCPD) and Westpac CPS (+27bps, ASX code: WBCPC).

Bells Potter fixed income desk are recommending investors switch from ANZ Capital Notes 2 (ASX code: ANZPE) to NAB Capital Notes 3 (ASX code: NABPD) The rationale is a pick up in the trading margin, which they calculate is worth 0.34% annum, as well as the receipt of a higher proportion of the return in income form. ANZ have an issue margin of 325bps and are trading at a discount to face value whereas NAB‘s issue margin is 495bps and now trade at a premium.

YieldReport does not make recommendations but note the latest Commonwealth Bank PERLS 8 hybrids (ASX code: CBAPE) do stick out as trading at a very low trading margin relative to other hybrids. The issue margin is 520bps above the bank bill rate and hence the running yield looks attractive. However investors are paying above face value to buy the hybrids and should consider this carefully.

160916-hybrids

ASX LISTED HYBRIDS

COMPANYCODEHYBRID
TYPE
MATURITY
OR STEP-UP
DATE
MARGIN
INC FRANK
TRADING
MARGIN
∆ WEEKWEEK
CLOSE
YTM
Est**
AMP Capital NotesAMPPACapital Note Basel322-Dec-215.10%4.31%-0.22%103.406.05%
ANZ Banking GroupANZPAMCPS Basel216-Dec-163.10%3.72%1.27%99.845.46%
ANZ Banking GroupANZPCMCPS Basel328-Sep-173.10%3.12%0.48%100.165.07%
ANZ Banking GroupANZPDMCPS Basel31-Sep-213.40%4.17%0.27%96.956.12%
ANZ Banking GroupANZPECapital Note Basel324-Mar-223.25%4.10%-0.15%95.906.05%
ANZ Banking GroupANZPFCapital Note Basel324-Mar-233.60%4.41%-0.01%95.606.36%
Bendigo BankBENHBPerpetual21-Oct-541.00%2.74%0.04%70.004.48%
Bendigo BankBENPDMCPS Basel313-Dec-175.00%3.52%0.34%103.505.47%
Bendigo BankBENPEMCPS Basel330-Nov-203.20%4.44%0.03%97.006.39%
Bendigo BankBENPFMCPS Basel315-Jun-214.00%4.49%0.03%99.506.44%
Bank Of QueenslandBOQPDMCPS Basel315-Apr-185.10%3.46%-0.19%105.405.41%
CBA PERLS 6CBAPCMCPS Basel315-Dec-183.80%3.26%0.22%101.125.00%
CBA PERLS 7CBAPDMCPS Basel315-Dec-222.80%4.57%0.13%91.006.31%
CBA PERLS 8CBAPEMCPS Basel315-Oct-215.20%3.84%-0.15%105.845.58%
ChallengerCGFPACapital Note25-May-203.40%4.39%0.10%97.056.13%
Insurance Aust.IAGPCMCPS Basel31-May-174.00%2.67%-0.49%103.004.62%
Insurance Aust. (NZ) RESIANGReset Preference16-Dec-194.00%3.68%0.03%100.955.42%
Macquarie BankMBLHBIncome SecuritiesPerpetual1.70%4.09%0.06%66.005.83%
Macquarie BankMBLPACapital Note Basel324-Mar-213.30%3.93%-0.08%97.385.88%
Macquarie GroupMQGPACapital Note Basel37-Jun-194.00%3.53%0.00%102.505.48%
Macquarie GroupMQGPBCapital Note Basel317-Mar-225.15%4.67%0.11%102.106.62%
Multiplex SITESMXUPAPerp'l PreferencePerpetual3.90%6.54%0.11%71.868.28%
Nat Aust BankNABHAIncome SecuritiesPerpetual1.25%3.33%0.01%66.995.07%
Nat Aust BankNABPAMCPS Basel320-Mar-193.20%3.66%0.23%98.855.40%
Nat Aust BankNABPBMCPS Basel317-Dec-203.25%4.05%0.04%96.955.79%
Nat Aust BankNABPCCapital Note Basel323-Mar-203.50%4.06%0.11%98.125.80%
Nat Aust BankNABPDCapital Note Basel37-Jul-204.95%4.49%0.07%103.506.23%
NufarmNFNGStep UpPerpetual3.90%5.14%0.07%86.617.09%
PaperlinxPXUPAPerp'l Preference30-Jun-52N/A8.80%0.00%11.0010.75%
Ramsay Health CareRHCPAPerp'l PreferencePerpetual4.85%4.68%-0.07%105.006.63%
Suncorp-MetwaySBKHBIncome SecuritiesPerpetual0.75%2.09%0.03%74.763.83%
SuncorpSUNPCMCPS Basel317-Dec-174.65%2.44%-0.14%102.604.18%
SuncorpSUNPEMCPS Basel317-Jun-203.40%3.69%-0.05%99.005.43%
Seven Network TELYS 4SVWPAPerp'l Preference2-Dec-544.75%9.23%-0.23%70.0011.18%
WestpacWBCPCMCPS Basel331-Mar-183.25%3.03%0.27%102.704.98%
WestpacWBCPDMCPS Basel38-Mar-193.20%3.71%0.31%98.905.45%
WestpacWBCPEMCPS Basel322-Sep-223.05%4.25%-0.16%93.905.99%
WestpacWBCPFCapital Note Basel322-Mar-214.00%3.97%-0.22%100.005.71%
WestpacWBCPGCapital Note Basel320-Dec-214.90%4.47%0.03%103.306.21%
** YTM for floating rate securities is an estimate using current interest rates. This will vary if rates change.
Source: Evans & Partners. Dealing Contact Michael Saba +61 3 9631 9813