04 Apr – 08 Apr 2016

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Corporate bond spreads reversed the previous week’s direction and generally widened. Australian credit default swap prices rose over the week and the iTraxx Series 25 index rose to 140.6, up from 136.8. Added together, and in conjunction with a fall in yields globally, this suggests investors became risk averse during the week, preferring government debt to corporate issues.

itraxx-8apr-yieldreport

While not quite as big as the bond sales out of ANZ and NAB in recent weeks, Telstra’s €750 million (AUD$1.1 billion) worth of April 2026s is still on the larger side of non-bank transactions for a domestic issuer. The last time Telstra issued euro-denominated bonds was in March 2013 but on that occasion it was for €1 billion. Pricing suggested the ‘shortage’ of quality euro bonds driven by the ECB’s QE purchases resulted in strong demand and lower pricing for Telstra.

Suncorp also came up with a sizeable two tranche deal worth $750 million comprising $600 million fixed tranche of April 2021s at Swap+ 138bps and $150 million worth of April 2021 FRNs at 3m BBSW + 138bps. Royal Bank of Canada (Sydney) returned to issue a relatively modest (for them) $175 million June 2026s at ACGB + 134bps. Westpac Bank added to the increasing number of renminbi deals by issuing a tiny CNY190 million (AUD$39 million) worth of April 2020s and CBA refinanced $225 million of its Medallion Trust 2011-1 Class A2 tranche at 1m BBSW + 140bps.

Another busy week in the Kangaroo market saw the Asian Development Bank issue $225 million 2026s at ACGB + 59.25bps and serial Kangaroo market player KfW Bankengruppe issue $200 million April 2020s. Eurofima chipped in with the sale of $25 million December 2025s at ACGB + 66.25bps and Inter-American Development Bank issued $50 million June 2026s at Swap + 50bps. Nordic investment Bank returned after a nine month absence to issue $70 million February 2026s at ACGB + 55.5bps.

corporate-8apr-yieldreport
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AUS CORPORATE BONDS

ISSUERMATURITYCOUPON (%)RATINGWEEK
HIGH
WEEK
LOW
CLOSING
YIELD
Δ WEEKΔ MONTH
Stockland1-Jul-167.50A-3.083.053.05-0.08-0.11
Fonterra11-Jul-166.25A+2.912.882.88-0.04-0.07
Telstra2-Aug-167.00A2.692.662.66-0.04-0.09
Melb Airport25-Aug-167.00A-3.063.033.03-0.05-0.13
Mirvac Finance16-Sep-168.00BBB+3.303.263.26-0.05-0.07
Wesfarmers4-Nov-166.00A-2.932.892.89-0.05-0.08
Westpac18-Nov-167.25AA-2.562.522.52-0.05-0.11
Suncorp (CB)6-Dec-164.75n/a2.742.702.70-0.05-0.07
CBA (CB)25-Jan-175.75n/a2.572.532.53-0.06-0.08
Aust Post6-Feb-175.50AA2.842.812.81-0.06-0.07
Westpac (CB)6-Feb-175.75n/a2.572.532.53-0.06-0.07
NAB15-Feb-176.00AA-2.572.522.52-0.07-0.14
Westpac20-Feb-176.00AA-2.572.532.53-0.06-0.13
Crown18-Jul-175.75BBB3.873.823.82-0.08-0.02
BP Cap5-Sep-174.50A3.243.203.20-0.06-0.06
BHP18-Oct-173.75A+3.353.313.31-0.07-0.29
Telstra15-Nov-174.00A2.932.902.90-0.06-0.06
HSBC16-Nov-174.25AA-2.922.882.88-0.07-0.05
Westpac24-Jan-184.25AA-2.722.692.69-0.07-0.15
CBA25-Jan-184.25AA-2.712.672.67-0.07-0.17
NAB7-Mar-187.25AA-2.742.682.68-0.09-0.18
ANZ17-Apr-184.25AA-2.752.692.69-0.10-0.24
NAB23-May-184.00AA-2.762.702.70-0.10-0.18
Syd Airport6-Jul-187.75BBB3.303.273.27-0.07-0.06
ANZ6-Nov-184.50AA-2.882.832.83-0.10-0.19
Lendlease13-Nov-185.50BBB-4.404.364.36-0.09-0.08
Telstra13-Nov-184.50A3.033.003.00-0.08-0.08
Westpac25-Feb-194.50AA-2.932.892.89-0.09-0.17
Woolworths21-Mar-196.00A-3.723.683.68-0.08-0.26
Wesfarmers28-Mar-196.25A-3.323.293.29-0.08-0.09
CBA24-Apr-194.25AA-2.952.912.91-0.10-0.18
Bris Airport9-Jul-198.00BBB3.473.443.44-0.08-0.03
Apple Inc28-Aug-192.85AA+2.882.832.83-0.09-0.15
Stockland6-Sep-195.50A-3.593.553.55-0.08-0.08
DBNGP11-Oct-196.00BBB-4.084.044.04-0.08-0.04
Westfield Retail23-Oct-195.00A3.513.423.42-0.15-0.25
CBA5-Feb-207.25AA-3.063.023.02-0.09-0.09
Westpac11-Feb-207.25AA-3.073.033.03-0.09-0.14
Wesfarmers12-Mar-204.75A-3.543.503.50-0.09-0.09
Qantas27-Apr-206.50BB+4.504.464.46-0.08-0.23
Lendlease13-May-206.00BBB-4.694.654.65-0.09-0.02
Melb Airport4-Jun-205.00A-3.383.343.34-0.09-0.06
Telstra15-Jul-207.75A3.233.193.19-0.10-0.15
Perth Airport23-Jul-206.00BBB3.923.883.88-0.09-0.07
Mirvac Fin18-Sep-205.75BBB+3.993.953.95-0.09-0.04
Bris Airport21-Oct-206.00BBB3.783.733.73-0.09-0.09
Aust Post13-Nov-205.00AA3.083.043.04-0.09-0.12
Stockland25-Nov-208.25A-3.713.673.67-0.09-0.10
Uni Sydney16-Apr-214.75Aa12.972.932.93-0.09-0.10
Apple Inc28-Aug-223.70AA+3.263.213.21-0.09-0.22
Melb Airport15-Sep-224.00A-3.753.713.71-0.09-0.05
Telstra16-Sep-224.00A3.483.443.44-0.08-0.11
CBA (AU)27-May-244.75AA-3.153.103.10-0.09-0.13
NAB25-Jun-245.00AA-3.553.503.50-0.09-0.13
Wells Fargo & Co.27-Aug-244.75A+3.943.873.87-0.11-0.15
Uni Sydney28-Aug-253.75Aa13.513.473.47-0.09-0.12
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