26 Oct – 30 Oct 2015

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Corporate bond yields fell anywhere between 2bps and 5bps whereas corresponding Commonwealth bonds fell 4bps. Consequently spreads were steady on average with some variation depending on the issuer.

Commonwealth Bank went offshore to offer $US2.25 billion of bonds in a three tranche deal that comprised two fixed components and one floating component. The largest tranche was a US$1 billion 5 year fixed rate bond at Treasurys + 103bps, with a US$750m 3 year fixed rate bond rate at Treasurys + 85bps and US$500 million 3 year FRNs at LIBOR +79bps making up the other two.

BBB+/Ba1 rated Transurban issued US$550 million 10y bonds at Treasurys + 220bps in its first foray into the US 144a market. Transurban said the most of proceeds will be used to repay USD drawn debt under existing working capital facilities and a term debt facility maturing in May 2017, while diversifying its debt sources and lengthening its maturity profile.

Bank of America’s Australian office issued $850 million 3 year FRNs at BBSW +110bps in a change from its previous practice of the US company issuing into the Kangaroo market.

Late in the week National Australia Bank issued $2.1 billion worth of 5 year FRNs at 3 month BBSW + 108bps while ANZ finalised the pricing of a 1 year unsecured note at BBSW + 42bps. Back in May this year National issued 5 year FRNs at BBSW + 80bps, considerably less than the current issue. National is not is under any particular cloud and so the difference is indicative of overall market conditions.

Corporate Bonds Spread 30102015

Click here for new debt issues

There were only the two deals in the Kangaroo market; a debut issue from Swedbank and one from regular issuer International Finance Corporation (IFC). Swedbank made its debut with a two-tranche deal composed of $325million worth of 3 year floating rate notes at BBSW + 115bps and $66.5million worth of 10 year fixed rate bonds at Swap + 115bps. Swedbank is rated A+ by S&P and Aa3 by Moodys.

The iTraxx Australian CDS index continued its gradual descent, finishing the week at 117, down from the previous 119.3 and with little in the way of corporate news to alarm investors.

Woolworths, which has a BBB+ rating from S & P, had it outlook changed to negative in a move which would not have surprised many given the company’s latest profit results.

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AUST CORPORATE BONDS

ISSUERMATURITYCOUPON (%)RATINGWEEK
HIGH
WEEK
LOW
CLOSING
YIELD
Δ WEEKΔ MONTH
ANZ9-May-166.75AA-2.342.272.31-0.01-0.08
Westpac9-May-166.75AA-2.342.262.300.00-0.06
Transurban8-Jun-166.75A-3.173.103.13-0.03-0.08
Stockland1-Jul-167.50A-2.922.842.88-0.02-0.13
Fonterra11-Jul-166.25A+2.712.632.67-0.02-0.10
Telstra2-Aug-167.00A2.442.362.40-0.02-0.11
Melb Airport25-Aug-167.00A-2.872.792.83-0.04-0.13
Mirvac Finance16-Sep-168.00BBB+3.052.983.02-0.01-0.10
Wesfarmers4-Nov-166.00A-2.662.592.630.00-0.09
Westpac18-Nov-167.25AA-2.352.272.31-0.01-0.10
Suncorp (CB)6-Dec-164.75n/a2.482.402.45-0.03-0.07
CBA (CB)25-Jan-175.75n/a2.342.272.31-0.01-0.09
Aust Post6-Feb-175.5AA2.632.562.60-0.01-0.10
Westpac (CB)6-Feb-175.75n/a2.352.272.32-0.01-0.08
NAB15-Feb-176.00AA-2.422.342.380.00-0.09
Westpac20-Feb-176.00AA-2.412.332.37-0.01-0.11
Crown18-Jul-175.75BBB3.333.263.29-0.01-0.10
BP Cap5-Sep-174.50A2.932.862.890.00-0.12
BHP18-Oct-173.75A+3.123.043.07-0.010.02
Telstra15-Nov-174.00A2.742.662.700.00-0.08
HSBC16-Nov-174.25AA-2.692.612.65-0.02-0.09
Westpac24-Jan-184.25AA-2.592.512.55-0.01-0.11
CBA25-Jan-184.25AA-2.592.512.56-0.01-0.09
NAB7-Mar-187.25AA-2.592.512.54-0.02-0.13
ANZ17-Apr-184.25AA-2.682.602.63-0.01-0.12
NAB23-May-184.00AA-2.682.602.63-0.02-0.11
Syd Airport6-Jul-187.75BBB3.203.123.14-0.03-0.14
ANZ6-Nov-184.50AA-2.802.722.75-0.02-0.10
Lendlease13-Nov-185.50BBB-4.094.004.02-0.040.02
Telstra13-Nov-184.50A2.942.862.88-0.02-0.13
Westpac25-Feb-194.50AA-2.862.792.81-0.03-0.07
Woolworths21-Mar-196.00A-3.533.473.520.01-0.07
Wesfarmers28-Mar-196.25A-3.163.073.10-0.03-0.04
CBA24-Apr-194.25AA-2.902.812.85-0.03-0.11
Bris Airport9-Jul-198.00BBB3.403.313.33-0.05-0.09
Apple Inc28-Aug-192.85AA+2.782.692.70-0.04-0.22
Stockland6-Sep-195.50A-3.513.413.44-0.03-0.10
DBNGP11-Oct-196.00BBB-3.963.873.89-0.04-0.13
Westfield Retail23-Oct-195.00A3.533.443.46-0.04-0.11
CFS Retail19-Dec-195.00A3.273.183.21-0.04-0.13
CBA5-Feb-207.25AA-3.093.013.03-0.02-0.11
Westpac11-Feb-207.25AA-3.103.003.03-0.04-0.13
Wesfarmers12-Mar-204.75A-3.383.283.30-0.03-0.10
Qantas27-Apr-206.50BB+5.064.964.99-0.040.05
Lendlease13-May-206.00BBB-4.494.404.43-0.030.11
Melb Airport4-Jun-205.00A-3.433.333.35-0.05-0.14
Telstra15-Jul-207.75A3.293.193.21-0.05-0.12
Perth Airport23-Jul-206.00BBB3.773.673.72-0.02-0.03
Mirvac Fin18-Sep-205.75BBB+3.733.653.68-0.02-0.06
Bris Airport21-Oct-206.00BBB3.743.643.66-0.04-0.06
Aust Post13-Nov-205.00AA3.163.073.10-0.04-0.08
Stockland25-Nov-208.25A-3.703.603.65-0.02-0.07
Uni Sydney16-Apr-214.75n/a3.042.942.96-0.04-0.15
Apple Inc28-Aug-223.70AA+3.493.403.42-0.04-0.37
Telstra16-Sep-224.00A3.843.713.73-0.08-0.23
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