17 Aug– 21 Aug 2015

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The news of the week was Apple’s mega three tranche issue of 4y and 7y bonds with the 4y ($700m fixed, $400m floating) done at BBSW + 65bps and the $1.15bn 7y at Swap + 110bps. The spread was driven by the pricing on Apple’s US yield curve that would have swapped back into AUD at 116bps. NAB called the issue “cheap” while Vivek Prabhu from Perpetual Investments suggested the pricing was tight with investors perhaps picking up 40bps extra by investing in the Apple US 2024 bond and swapping it back into AUD at 145bps. This, of course, may not be allowed in some fund mandates that are restricted to AUD issues. For more information about the Apple issue click here.

bond-corporate-21aug

Austwide, a former building society and recently converted bank, sold $25m 364d FRNs at BBSW + 65bps and the University of Sydney issued $100m 10y bonds at Swap + 95bps, which is not that far from the 88bps over BBSW the university secured on a $200m 7y deal in April 2014.

Another standout deal was Lloyds Bank issue of $600m in a three tranche deal. The $250m 3y fixed and $200m floating components were done at Swap + 100bps, while the $150m 10y tranche was done at Swap + 145bps. There were a number of other deals in a solid week for issuance and details of these can be found here.

Click here for new debt issues

ITraxx continued to rise. After spiking to 106 in early July on the back of Chinese sharemarket volatility, it rallied back to a low of 91.6 before rising again to last week’s close of 108.8. The increased risk of slower global growth is seen as potentially feeding into lower corporate earnings and thus a reduced ability to service debt. iTraxx is back to levels reached in February 2014.

itraxx-21aug
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AUST CORPORATE BONDS

ISSUERMATURITYCOUPON (%)RATINGWEEK
HIGH
WEEK
LOW
CLOSING
YIELD
Δ WEEKΔ MONTH
ANZ9-May-166.75AA-2.352.292.29-0.08-0.09
Westpac9-May-166.75AA-2.362.302.30-0.09-0.08
Transurban8-Jun-166.75A-3.193.143.14-0.07-0.05
Stockland1-Jul-167.50A-2.972.902.90-0.06-0.07
Fonterra11-Jul-166.25A+2.762.692.69-0.06-0.06
Telstra2-Aug-167.00A2.492.422.42-0.07-0.09
Melb Airport25-Aug-167.00A-2.982.912.91-0.07-0.08
Mirvac Finance16-Sep-168.00BBB+3.093.013.01-0.11-0.12
Wesfarmers4-Nov-166.00A-2.662.582.58-0.08-0.09
Westpac18-Nov-167.25AA-2.442.352.35-0.09-0.11
Suncorp (CB)6-Dec-164.75n/a2.542.452.45-0.08-0.10
CBA (CB)25-Jan-175.75n/a2.412.322.32-0.09-0.10
Aust Post6-Feb-175.50AA2.752.652.65-0.10-0.10
Westpac (CB)6-Feb-175.75n/a2.422.332.33-0.09-0.11
NAB15-Feb-176.00AA-2.472.382.38-0.10-0.12
Westpac20-Feb-176.00AA-2.452.362.36-0.09-0.14
Crown18-Jul-175.75BBB3.453.353.35-0.10-0.18
BP Cap5-Sep-174.50A3.022.922.92-0.10-0.11
BHP18-Oct-173.75A+3.002.902.90-0.10-0.09
Telstra15-Nov-174.00A2.772.662.66-0.09-0.11
HSBC16-Nov-174.25AA-2.792.682.68-0.14-0.15
Westpac24-Jan-184.25AA-2.662.552.55-0.11-0.17
CBA25-Jan-184.25AA-2.672.562.56-0.12-0.16
NAB7-Mar-187.25AA-2.682.572.57-0.12-0.18
ANZ17-Apr-184.25AA-2.722.612.61-0.12-0.17
NAB23-May-184.00AA-2.752.632.63-0.12-0.19
Syd Airport6-Jul-187.75BBB3.373.263.26-0.12-0.15
ANZ6-Nov-184.50AA-2.822.712.71-0.12-0.22
Lendlease13-Nov-185.50BBB-3.953.833.83-0.12-0.15
Telstra13-Nov-184.50A2.922.812.81-0.11-0.13
Westpac25-Feb-194.50AA-2.892.782.78-0.12-0.20
Woolworths21-Mar-196.00A-3.453.353.35-0.07-0.09
Wesfarmers28-Mar-196.25A-3.163.043.04-0.13-0.17
CBA24-Apr-194.25AA-2.932.822.82-0.12-0.25
Bris Airport9-Jul-198.00BBB3.503.393.39-0.13-0.18
Stockland6-Sep-195.50A-3.603.483.48-0.16-0.19
DBNGP11-Oct-196.00BBB-4.103.983.98-0.12-0.19
Westfield Retail23-Oct-195.00A3.613.483.48-0.14-0.16
CFS Retail19-Dec-195.00A3.423.293.29-0.15-0.21
CBA5-Feb-207.25AA-3.133.003.00-0.12-0.25
Westpac11-Feb-207.25AA-3.133.003.00-0.12-0.25
Wesfarmers12-Mar-204.75A-3.383.253.25-0.12-0.17
Qantas27-Apr-206.50BB+4.964.824.82-0.12-0.27
Lendlease13-May-206.00BBB-4.274.144.14-0.13-0.16
Melb Airport4-Jun-205.00A-3.543.413.41-0.14-0.22
Telstra15-Jul-207.75A3.253.123.12-0.11-0.19
Perth Airport23-Jul-206.00BBB3.793.653.65-0.14-0.21
Mirvac Fin18-Sep-205.75BBB+3.823.683.68-0.23
Bris Airport21-Oct-206.00BBB3.803.663.66-0.22
Aust Post13-Nov-205.00AA3.273.133.13-0.25
Stockland25-Nov-208.25A-3.833.693.69-0.23
Uni Sydney16-Apr-214.75n/a3.173.053.05-0.27
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