20 Jun – 24 Jun 2016

Share

ASX-listed floating rate hybrid margins were higher on average this week with a good portion of the rise coming at the end of the week. The median trading margin rose from 4.48% to 4.64% and, unlike ASX listed bonds and notes, almost all securities in this sector of the market ended with higher trading margins, as hybrids were caught up in the equity market sell-off.

Bell Potter is recommending Commonwealth PERLS 7 (ASX code: CBAPD) and Westpac Capital Notes 2 (ASX code: WBCPE) which are both trading well below face value. Both securities were issued when margins were materially lower. Bell Potter said, “For investors that are happy to receive offset lower income levels with a capital return component from narrowing the discount to face value, CBAPD and WBCPE are worthy of consideration.”  The diagram below illustrates why.

hybrids-jun24

ASX-LISTED HYBRIDS

COMPANYCODEHYBRID
TYPE
MATURITY
OR STEP-UP
DATE
MARGIN
INC FRANK
TRADING
MARGIN
∆ WEEKWEEK
CLOSE
YTM
Est**
AMP Capital NotesAMPPABasel III22-Dec-215.10%4.34%0.11%103.496.29%
ANZ Banking GroupANZPAMCPS II16-Dec-163.10%3.25%0.44%100.015.20%
ANZ Banking GroupANZPCMCPS III28-Sep-173.10%3.72%0.21%100.855.73%
ANZ Banking GroupANZPDMCPS III1-Sep-213.40%5.00%-0.05%94.807.01%
ANZ Banking GroupANZPECapital Note24-Mar-223.25%5.13%0.09%92.537.14%
ANZ Banking GroupANZPFCapital Note24-Mar-233.60%5.43%0.26%91.807.44%
Bendigo BankBENHBPerpetual21-Oct-541.00%3.06%-0.01%66.005.01%
Bendigo BankBENPDMCPS III13-Dec-175.00%4.25%0.37%101.206.26%
Bendigo BankBENPEMCPS III30-Nov-203.20%5.27%0.17%92.597.28%
Bendigo BankBENPFMCPS III15-Jun-214.00%5.62%0.48%93.547.63%
Bank Of QueenslandBOQPDMCPS III16-Apr-185.10%4.30%-0.18%102.656.31%
CBA PERLS 6CBAPCMCPS III15-Dec-183.80%3.71%-0.06%100.305.66%
CBA PERLS 7CBAPDMCPS III15-Dec-222.80%5.46%0.32%86.557.41%
CBA PERLS 8CBAPEMCPS IIII15-Oct-215.20%4.64%0.07%102.606.59%
ChallengerCGFPACapital Note25-May-203.40%4.97%0.17%95.056.92%
IAGIAGPCMCPS III1-May-174.00%3.17%-0.58%101.505.18%
IAG RESIANGReset pref16-Dec-194.00%4.00%0.26%100.115.95%
Macquarie BankMBLHBIncome SecPerpetual1.70%4.14%0.07%65.506.09%
Macquarie BankMBLPACapital Note III24-Mar-203.30%4.86%-0.04%95.056.87%
Macquarie GroupMQGPACapital Note III19-Jun-184.00%3.76%-0.08%100.615.77%
Macquarie GroupMQGPBCapital Note III17-Mar-215.15%5.30%0.07%101.207.31%
Multiplex SITESMXUPAPerp'l PrefPerpetual3.90%6.81%0.19%71.258.76%
Nat Aust BankNABHAIncome SecPerpetual1.25%3.45%-0.02%65.605.40%
Nat Aust BankNABPAMCPS III20-Mar-193.20%4.47%0.05%96.856.42%
Nat Aust BankNABPBMCPS III17-Dec-203.25%5.05%0.25%93.207.00%
Nat Aust BankNABPCCapital Note III23-Mar-203.50%4.98%0.56%95.136.93%
NufarmNFNGStep UpPerpetual3.90%5.54%0.05%81.027.55%
PaperlinxPXUPAPerp'l Pref30-Jun-52N/A8.80%0.00%9.8510.81%
Ramsay Health CareRHCPAPerp'l PrefPerpetual4.85%4.67%0.02%103.556.68%
Suncorp-MetwaySBKHBIncome SecPerpetual0.75%1.96%0.01%76.803.91%
SuncorpSUNPCMCPS III17-Dec-174.65%3.83%0.04%101.255.78%
SuncorpSUNPEMCPS III17-Jun-203.40%4.83%0.34%95.106.78%
Seven Network TELYS 4SVWPAPerp'l Pref2-Dec-544.75%11.91%-0.09%56.4013.92%
WestpacWBCPCMCPS III31-Mar-183.25%3.78%-0.09%100.285.79%
WestpacWBCPDMCPS III8-Mar-193.20%4.39%-0.05%97.246.34%
WestpacWBCPEMCPS III23-Sep-223.05%5.47%0.42%88.007.42%
WestpacWBCPFCapital Note III22-Mar-214.00%4.64%0.25%97.426.59%
** 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