16 Nov – 20 Nov 2015

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Corporate bond yields generally rose between 1bp and 3bps whereas corresponding Commonwealth bonds fell 6bps. YieldReport has commented on the contraction of corporate spreads in recent weeks but this time spreads took a break from the recent trend and widened by 4-6bps.

It was a looking like a subdued week in comparison with the plethora of corporate issues in the previous week, until Westpac went to the US market with a three tranche fixed/floating issue in a deal reminiscent of ANZ’s deal in the previous week. It comprised two 3 year tranches – USD$750 million of floating rate and USD$1 billion of fixed rate – at 3 month LIBOR + 74bps and Treasurys + 77bps respectively and a USD$1 billion tranche of 5 year fixed rate bonds at Treasurys + 97bps.

A lot of the issuance was into offshore markets. Virgin added USD$100m to the USD$300m 8.50% November 2019 bonds it originally issued in November 2014 and, in what turned out to be a busy week for Macquarie Group, the investment group issued USD$50m 3 year bonds into the US market while its banking subsidiary Macquarie Bank sold HKD$100 million of three year bonds at a yield of 2.00% per annum.

Commonwealth Bank and Woolworths decided to visit the Japanese uridashi market. Woolworths issued ¥20 billion of five year bonds at a yield of 0.77% while Commonwealth Bank issued ¥9.8 billion 1.5 year bonds at a yield of 2.00%.

corporatebond-20nov

Rabobank is perhaps better known in the Australian bond market for its activities in the Kangaroo market but this time the Australian subsidiary tapped its May 2026 line for $50 million at ACGB + 137bps, 4bps more than the 133bps margin it is paying for the $100 million issued in the first week of November. And Intel has launched a new benchmark December 2019 fixed/floating issue with price guidance.

There was just the one deal in the Kangaroo market space this week. Korea Development Bank issued $300m worth of 3 year FRNs at BBSW + 103bps, just a little under the 105bps indicated prior to pricing.

Greater Building Society had its credit rating upgraded by Standard & Poors from BBB to BBB+ while QT Mutual Bank from Baa1 to A3 but the big news of the week in the ratings area is Qantas’ return to investment grade status, moving from BB+ to BBB-

The iTraxx Australian CDS index gain edged a little lower this week, finishing the week at 118.8, down from the previous 119.8.

itraxx 20nov

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AUST CORPORATE BONDS

ISSUERMATURITYCOUPON (%)RATINGWEEK
HIGH
WEEK
LOW
CLOSING
YIELD
Δ WEEKΔ MONTH
ANZ9-May-166.75AA-2.532.472.480.000.10
Westpac9-May-166.75AA-2.502.452.470.000.10
Transurban8-Jun-166.75A-3.343.283.310.010.11
Stockland1-Jul-167.50A-3.113.083.09-0.010.13
Fonterra11-Jul-166.25A+2.892.882.89-0.010.15
Telstra2-Aug-167.00A2.652.622.63-0.010.13
Melb Airport25-Aug-167.00A-3.083.063.07-0.010.13
Mirvac Finance16-Sep-168.00BBB+3.293.253.26-0.010.17
Wesfarmers4-Nov-166.00A-2.912.862.88-0.010.19
Westpac18-Nov-167.25AA-2.582.532.54-0.010.18
Suncorp (CB)6-Dec-164.75n/a2.722.692.71-0.010.22
CBA (CB)25-Jan-175.75n/a2.582.562.56-0.020.18
Aust Post6-Feb-175.50AA2.852.822.84-0.010.17
Westpac (CB)6-Feb-175.75n/a2.582.552.57-0.010.21
NAB15-Feb-176.00AA-2.642.602.62-0.010.19
Westpac20-Feb-176.00AA-2.642.602.62-0.010.19
Crown18-Jul-175.75BBB3.603.563.590.000.22
BP Cap5-Sep-174.50A3.163.133.15-0.010.17
BHP18-Oct-173.75A+3.393.333.370.010.21
Telstra15-Nov-174.00A2.982.932.95-0.010.18
HSBC16-Nov-174.25AA-2.912.872.90-0.010.17
Westpac24-Jan-184.25AA-2.812.772.800.000.17
CBA25-Jan-184.25AA-2.822.772.810.000.17
NAB7-Mar-187.25AA-2.832.792.830.000.19
ANZ17-Apr-184.25AA-2.912.852.900.000.20
NAB23-May-184.00AA-2.902.852.900.000.18
Syd Airport6-Jul-187.75BBB3.433.373.430.010.16
ANZ6-Nov-184.50AA-3.042.983.040.020.21
Lendlease13-Nov-185.50BBB-4.354.284.350.020.27
Telstra13-Nov-184.50A3.153.093.150.020.16
Westpac25-Feb-194.50AA-3.113.053.110.020.22
Woolworths21-Mar-196.00A-3.883.823.880.020.27
Wesfarmers28-Mar-196.25A-3.403.333.400.010.22
CBA24-Apr-194.25AA-3.143.083.140.020.20
Bris Airport9-Jul-198.00BBB3.623.563.620.010.19
Apple Inc28-Aug-192.85AA+2.992.942.990.000.07
Stockland6-Sep-195.50A-3.793.733.790.030.24
DBNGP11-Oct-196.00BBB-4.224.164.220.010.20
Westfield Retail23-Oct-195.00A3.793.733.790.010.18
CFS Retail19-Dec-195.00A3.483.433.480.010.15
CBA5-Feb-207.25AA-3.313.243.310.030.18
Westpac11-Feb-207.25AA-3.323.263.320.010.19
Wesfarmers12-Mar-204.75A-3.623.563.610.010.22
Qantas27-Apr-206.50BB+5.244.935.18-0.110.10
Lendlease13-May-206.00BBB-4.744.684.740.010.28
Melb Airport4-Jun-205.00A-3.643.593.640.010.15
Telstra15-Jul-207.75A3.533.473.530.010.17
Perth Airport23-Jul-206.00BBB4.043.994.040.010.29
Mirvac Fin18-Sep-205.75BBB+4.284.024.130.060.35
Bris Airport21-Oct-206.00BBB3.953.903.950.010.20
Aust Post13-Nov-205.00AA3.373.313.370.010.14
Stockland25-Nov-208.25A-3.993.933.990.020.24
Uni Sydney16-Apr-214.75Aa13.263.203.260.000.16
Apple Inc28-Aug-223.70AA+3.673.623.66-0.01-0.05
Melb Airport15-Sep-224.00A-4.094.034.08-0.020.14
Telstra16-Sep-224.00A3.983.943.97-0.040.02
CBA27-May-244.75AA-3.643.593.630.020.13
NAB25-Jun-245.00AA-4.074.024.060.070.21
Wells Fargo & Co.27-Aug-244.75A+4.194.104.170.030.22
Uni Sydney28-Aug-253.75Aa14.053.984.030.040.15
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