19 Oct – 23 Oct 2015

Share on LinkedInTweet about this on TwitterEmail this to someonePrint this page

[private role=’subscriber’]

Recent corporate issuance has a distinct leaning towards floating rates rather than fixed and this may reflect investor demand in an environment where many are forecasting a US rate rise and perhaps higher levels of bond market volatility.

The largest deal for the week was from Westpac, with a two-tranche 5 year deal. The floating tranche was for $2.1bn while only $175m was at a fixed rate, both at a Swap + 108 bps margin.

Macquarie Bank issued a similarly structured deal: $750m of 3 year floating and $150m of 3 year fixed at Swap + 105bps. Back in March the bank issued a 5 year fixed and floating deal that at that time was $1Bn fixed and $500m floating, at Swap + 110bps.

Bank of Queensland just skipped the fixed part and went all floating by issuing $550m worth of 3.5 year bonds at BBSW +115bps which is 37bps more than the 3 year FRNs they issued in June.

Commonwealth went offshore, with a 3y floating deal worth ₤300m at BBSW + 95bps while BBB+ rated Brambles went against the floating trend, issuing US$500m 3 year fixed bonds at Treasurys + 212.5bps.

Corporate Bonds Spread 23102015
Click here for new debt issues

In the Kangaroo market, Groupe BPCE $175m issued 10y notes (non-callable for 5 years) at Swap + 320bps. Its last foray in the Kangaroo market was in April this year when it issued $800m April 2020s at Swap + 130bps. Auckland Council returned after a six week absence to issue another $25m of the March 2026s it last issued in early September. The swap issue margin was the same at 55bps but the margin to Commonwealth bonds was narrower, this time at 70.5bps rather than previous 79.25bps. Finally, regular issuer Inter-American Development Bank tapped its October 2025s for $25m at ACGB + 55.75bps, a fraction lower than the 56.5bps from the last tap in the first week of October.

iTrax 28092015-23102015

iTraxx Series 24 finished the week at 119.3, down marginally from  the previous week’s close of 120.8. Since the changeover from Series 23 to Series 24 in September, the index has averaged just over 127, although early figures coincided with an unusual period of heightened corporate risk and any average is probably inflated as a result. This latest figure is the lowest since the changeover.

[/private]

[private role=’subscriber’]

AUST CORPORATE BONDS

ISSUERMATURITYCOUPON (%)RATINGWEEK
HIGH
WEEK
LOW
CLOSING
YIELD
Δ WEEKΔ MONTH
ANZ9-May-166.75AA-2.352.312.310.03-0.11
Westpac9-May-166.75AA-2.352.302.300.03-0.11
Transurban8-Jun-166.75A-3.193.153.160.02-0.08
Stockland1-Jul-167.50A-2.942.892.900.02-0.12
Fonterra11-Jul-166.25A+2.722.662.690.04-0.10
Telstra2-Aug-167.00A2.472.422.420.01-0.10
Melb Airport25-Aug-167.00A-2.912.852.870.03-0.12
Mirvac Finance16-Sep-168.00BBB+3.073.013.030.03-0.10
Wesfarmers4-Nov-166.00A-2.672.622.630.03-0.09
Westpac18-Nov-167.25AA-2.362.302.320.03-0.13
Suncorp (CB)6-Dec-164.75n/a2.492.432.480.03-0.08
CBA (CB)25-Jan-175.75n/a2.352.292.320.04-0.11
Aust Post6-Feb-175.50AA2.642.582.600.03-0.13
Westpac (CB)6-Feb-175.75n/a2.362.302.320.04-0.11
NAB15-Feb-176.00AA-2.432.372.380.03-0.11
Westpac20-Feb-176.00AA-2.422.362.380.03-0.11
Crown18-Jul-175.75BBB3.353.293.300.03-0.12
BP Cap5-Sep-174.50A2.952.892.900.02-0.14
BHP18-Oct-173.75A+3.143.083.090.020.00
Telstra15-Nov-174.00A2.762.692.690.01-0.12
HSBC16-Nov-174.25AA-2.702.642.670.02-0.12
Westpac24-Jan-184.25AA-2.612.552.560.02-0.11
CBA25-Jan-184.25AA-2.612.552.570.02-0.10
NAB7-Mar-187.25AA-2.612.562.560.01-0.12
ANZ17-Apr-184.25AA-2.692.632.630.02-0.11
NAB23-May-184.00AA-2.682.622.650.01-0.10
Syd Airport6-Jul-187.75BBB3.223.173.170.00-0.16
ANZ6-Nov-184.50AA-2.812.762.770.00-0.05
Lendlease13-Nov-185.50BBB-4.104.054.060.010.07
Telstra13-Nov-184.50A2.952.902.90-0.01-0.10
Westpac25-Feb-194.50AA-2.872.822.840.02-0.05
Woolworths21-Mar-196.00A-3.563.503.50-0.02-0.10
Wesfarmers28-Mar-196.25A-3.173.123.120.02-0.01
CBA24-Apr-194.25AA-2.912.872.880.00-0.06
Bris Airport9-Jul-198.00BBB3.413.373.380.02-0.10
Apple Inc28-Aug-192.85AA+2.792.742.750.00-0.22
Stockland6-Sep-195.50A-3.523.473.470.00-0.14
DBNGP11-Oct-196.00BBB-3.973.933.930.00-0.15
Westfield Retail23-Oct-195.00A3.553.513.510.00-0.08
CFS Retail19-Dec-195.00A3.283.243.240.00-0.15
CBA5-Feb-207.25AA-3.103.043.050.00-0.08
Westpac11-Feb-207.25AA-3.093.053.070.01-0.09
Wesfarmers12-Mar-204.75A-3.393.333.330.02-0.09
Qantas27-Apr-206.50BB+5.034.985.030.040.15
Lendlease13-May-206.00BBB-4.504.434.460.010.10
Melb Airport4-Jun-205.00A-3.443.403.400.00-0.13
Telstra15-Jul-207.75A3.313.263.260.00-0.09
Perth Airport23-Jul-206.00BBB3.793.743.740.00-0.08
Mirvac Fin18-Sep-205.75BBB+3.753.703.700.02-0.15
Bris Airport21-Oct-206.00BBB3.763.713.71-0.01-0.07
Aust Post13-Nov-205.00AA3.183.133.130.00-0.12
Stockland25-Nov-208.25A-3.733.673.670.00-0.11
Uni Sydney16-Apr-214.75n/a3.053.013.010.00-0.15
Apple Inc28-Aug-223.70AA+3.523.463.46-0.04-0.40
Telstra16-Sep-224.003.883.813.81-0.05-0.23
[/private]