21 Mar – 24 Mar 2016

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Markets are expecting Westpac to redeem Westpac TPS trust units (ASX code: WCTPA) on the security’s 30 June step-up date. WCTPA are one of the few step-ups left on the ASX but one of the other issuers, CBA, has announced that its PERLS III (ASX code: PCAPA), are to be redeemed on the upcoming step-up date in early April. The price of WCTPA has risen since the CBA announcement.

Evans & Partners’ Michael Saba reminded investors in a note of the “90 day rule” regarding franking credits which come from preference shares holdings. Readers will probably be aware of the “45 day rule” and its relevance to ordinary shares whereby shareholders must be at risk for a clear 45 days over a dividend period to claim franking credits. It’s a little known fact that franked preference shares have a 90 day rule that works in the same way and is designed to stop traders “stripping” franking credits from dividend payments. This obscure taxation rule does not apply to most instruments so it is an easy one to miss.

hybrids-24mar

ASX-listed floating rate hybrid margins were again quite stable and by the end of the week the median trading margin was 4.86%, up a fraction from the previous week’s 4.83%.

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ASX-LISTED HYBRIDS

COMPANYCODEHYBRID
TYPE
MATURITY
OR STEP-UP
DATE
MARGIN
INC FRANK
TRADING
MARGIN
∆ WEEKWEEK
CLOSE
YTM
Est**
ANZ Banking GroupANZPAMCPS I16/12/20163.10%2.75%-0.29%100.355.05%
ANZ Banking GroupANZPCMCPS II28/09/20173.10%3.67%0.18%99.556.13%
ANZ Banking GroupANZPDMCPS II1/09/20213.40%5.42%-0.01%91.557.88%
ANZ Banking GroupANZPECapital Note24/03/20223.25%6.00%0.24%87.308.46%
ANZ Banking GroupANZPFCapital Note24/03/20233.60%5.84%-0.03%88.308.30%
Bendigo BankBENHBPerpetual21/10/20541.00%2.98%0.01%69.005.28%
Bendigo BankBENPDMCPS II13/12/20175.00%4.59%-0.13%102.687.05%
Bendigo BankBENPEMCPS II30/11/20203.20%6.13%-0.09%90.658.59%
Bendigo BankBENPFMCPSII15/06/20214.00%6.38%0.20%91.958.84%
Bank Of QueenslandBOQPDMCPS II16/04/20185.10%4.82%-0.22%103.857.28%
CBA PERLS 6CBAPCMCPS II15/12/20183.80%4.03%-0.45%99.556.33%
CBA PERLS 7CBAPDMCPS II15/12/20222.80%5.52%-0.06%86.107.82%
ChallengerCGFPACapital Note25/05/20203.40%6.21%-0.33%90.698.51%
IAGIAGPCMCPS II1/05/20174.00%4.15%-0.22%102.356.61%
IAG RESIANGReset pref16/12/20194.00%4.60%0.07%98.206.90%
Macquarie BankMBLHBIncome SecPerpetual1.70%4.34%0.00%65.646.64%
MacquarieMBLPACapital Note24/03/20203.30%5.73%0.03%90.208.19%
MacquarieMQGPACapital Note19/06/20184.00%4.64%0.04%99.727.10%
Multiplex SITESMXUPAPerp'l PrefPerpetual3.90%6.71%-0.04%72.009.01%
Nat Aust BankNABHAIncome SecPerpetual1.25%3.77%-0.01%64.396.07%
Nat Aust BankNABPAMCPS II20/03/20193.20%4.86%0.14%95.607.16%
Nat Aust BankNABPBMCPS II17/12/20203.25%5.31%-0.08%92.007.61%
Nat Aust BankNABPCCapital Note23/03/20203.50%4.93%-0.17%95.097.23%
NufarmNFNGStep UpPerpetual3.90%5.60%-0.07%83.128.06%
PaperlinxPXUPAPerp'l Pref30/06/2052N/A8.80%0.00%10.0011.26%
Ramsay Health CareRHCPAPerp'l PrefPerpetual4.85%4.78%0.01%104.007.24%
Suncorp-MetwaySBKHBIncome SecPerpetual0.75%2.22%0.04%74.564.52%
SuncorpSUNPCMCPS II17/12/20174.65%3.89%0.21%101.356.19%
SuncorpSUNPEMCPS II17/06/20203.40%4.58%-0.25%95.806.88%
Seven Network TELYS 4SVWPAPerp'l Pref2/12/20544.75%10.41%0.30%59.3712.87%
WestpacWBCPCMCPS II31/03/20183.25%3.58%-0.38%99.266.04%
WestpacWBCPDMCPS II8/03/20193.20%4.85%0.33%95.867.15%
WestpacWBCPEMCPS II23/09/20223.05%5.63%0.25%87.107.93%
WestpacWBCPFCapital Note22/03/20214.00%4.94%-0.13%96.137.24%
WestpacWCTPAStep Up30/06/20161.00%1.52%-0.33%99.753.82%

** 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

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