29 Feb – 04 Mar 2016

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ASX-listed floating rate note and bond margins fell back sharply and by the end of the week, the median trading margin was 2.67%, down 58bps from the previous median trading margin of 3.25%. However, this drop was mostly from Australian Unity’s AYUHA which is close to its April maturity date and hence the margin can move around significantly. A small price movement has produced a large change in its trading margin, which is an annualised figure.

Tabcorp lost its final appeal against the State of Victoria for its claim for $686.83 million from changes in the Victorian gaming sector after 2012. Tabcorp said it had previously fully provisioned for this outcome and investors took it in their strides, as the chart below demonstrates with the drop in the trading margins. Tatts had previously won their case against the Victorian Government but has now lost on appeal. The court ordered Tatts to repay the $540 million it had already received plus interest and costs to the Victorian State Government. The trading margin on its TTSHA notes rose as a result.

notes-margin-4mar-yield

Changes in trading margins for Crown’s series 1 and series 2 notes are also shown and both series margin have continued to fall. At one stage the Series 1 notes had a trading margin over 18%. Now it is back to 12%, but it is still a long way above the 5% margins prior to the Packer-privatisation story surfacing.

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ASX LISTED FLOATING RATE NOTES

COMPANY
$100
Face Val
CODEBOND
TYPE
MATURITYISSUE
MARGIN
TRADING
MARGIN
Δ WEEKWEEK
CLOSE
YTM
Est**
AGLAGLHASub Note8/06/20193.80%3.23%-0.02%101.605.54%
AMPAMPHASub Note II18/12/20182.65%2.65%0.04%101.014.96%
ANZ Banking GroupANZHASub Note II14/06/20172.75%1.64%-0.16%102.383.95%
APT PipelinesAQHHASub Note31/03/20184.50%3.94%-0.34%102.256.25%
Australian UnityAYUHABond14/04/20163.55%2.00%-3.43%100.934.31%
ColonialCNGHASub Note31/03/20173.25%2.24%-0.66%101.994.55%
CaltexCTXHASub Note15/09/20174.50%3.52%0.15%101.205.83%
CrownCWNHASub Note14/09/20185.00%12.06%-1.29%85.0714.37%
CrownCWNHBSub Note23/07/20214.00%10.89%-0.91%74.0013.20%
Goodman GroupGMPPASub Note30/09/20183.90%4.62%0.32%99.406.93%
Bentham IMFIMFHABond30/06/20194.20%5.21%-0.16%98.027.52%
Nat Aust BankNABHBSub Note18/06/20172.75%1.81%-0.01%102.204.12%
OriginORGHASub Note22/12/20164.00%8.29%-0.40%98.0510.60%
Suncorp MetwaySUNPDSub Note II21/11/20182.85%2.93%-0.12%99.915.24%
TabcorpTAHHBSub Bond22/03/20174.00%2.50%-0.78%102.754.81%
TattsTTSHASnr. Bond5/07/20193.10%2.53%0.60%102.604.84%
WestpacWBCHASub Note23/08/20172.75%1.77%-0.15%101.494.08%
WestpacWBCHBSub Note II22/08/20182.30%2.67%-0.07%99.254.98%
WoolworthsWOWHCSub Note24/11/20163.25%1.83%-0.03%101.104.14%

ASX LISTED CONVERTIBLE NOTES

COMPANYCODEFACE
VALUE
MATURITYWEEK
HIGH
WEEK
LOW
WEEK
CLOSE
YTMSIZE
($m)
Aust FoundationAFIG$100.0028/02/2017110.95109.40110.958.62%$3.13 on 19 Aug 2016 (E)
Peet GroupPPCG$100.0016/06/20160.000.00102.008.86%$4.75 on 04 Jun 2016 (A)

ASX LISTED FIXED RATE BONDS

COMPANYCODETYPEMATURITYCOUPONWEEK
HIGH
WEEK
LOW
WEEK
CLOSE
YTMNEXT DIV
AND EX
DATE
Heritage BSHBSHBSnr Bond20/06/20177.25%104.85104.25104.304.81%$1.813 on 9 Mar 2016 (E)

** 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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