25 May – 29 May 2015

Share

Non-bank sub notes have been drifting with the general lack of buying supporting currently in the market. From the chart, higher margin sub notes have been moving wider in spread whilst lower spread names have been moving sideways. In particular ORGHA continues to widen despite a strong share price and good news that their 53% owned subsidiary Contact Energy is to pay a substantial special dividend in June. After a rally in the past month, GMPPA has widened again on light volume. Sellers had capped the pricing in April and look to be back. The new CWNHB is tracking with accrued interest as sellers prevail at $100.

The perpetual MXUPA tends to move with general equity market sentiment. Subsequent to the rate cut in February and the strong equity market after that time, the price moved strongly above $91. Despite another rate cut, MXUPA has been weak as shown in the charts below. With the equity market rebounding this week and the low cash rate, MXUPA is lagging. MXUPA is ex- interest in late June. The running yield is 6.90% all cash.

YieldReport-hybrid-2-29mayYieldReport-hybrid-29may

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ASX-LISTED HYBRIDS

COMPANYCODEHYBRID TYPEMATURITY OR STEP-UP DATEMARGIN INC FRANK TRADING MARGIN∆ WEEK WEEK CLOSE YTM Est**S&P CREDIT
RATING
COMP/HYBRID
ANZ Banking GroupANZPAMCPS I12/16/20163.10%2.67%-0.05%100.354.82%AA-/BBB
ANZ Banking GroupANZPCMCPS II09/28/20173.10%3.55%0.34%100.35.80%AA-/BBB+
ANZ Banking GroupANZPDMCPS II09/01/20213.40%3.88%-0.12%98.96.13%AA-/BBB+
ANZ Banking GroupANZPECapital Note03/24/20223.25%3.90%-0.15%97.46.15%AA-/
Bendigo BankBENHBPerpetual10/21/20541.00%2.44%0.16%76.54.59%A-/BBB
Bendigo BankBENPBStep Up06/15/20151.50%0.84%-2.37%99.82.99%A-/BBB
Bendigo BankBENPDMCPS II12/13/20175.00%3.23%-0.39%103.85.48%A-/BBB-
Bendigo BankBENPEMCPS II11/30/20203.20%4.13%-0.05%95.76.38%N/A
Bank Of QueenslandBOQPDMCPS II04/16/20185.10%3.52%-0.17%104.985.77%BBB+/BB+
CBA PERLS 3PCAPAStep Up04/06/20161.05%2.82%0.17%197.94.97%AA-/BBB
CBA PERLS 6CBAPCMCPS II12/15/20183.80%3.17%-0.03%103.25.32%AA-/BBB-
CBA PERLS 7CBAPDMCPS II12/15/20222.80%3.81%-0.14%95.045.96%AA-/BBB-
ChallengerCGFPACapital Note05/25/20203.40%4.14%0.04%96.936.29%-/-
EldersELDPAPerp'l Pref06/30/2051N/A0.00%0.00%74.260.00%N/A
IAGIAGPCMCPS II05/01/20174.00%3.41%0.12%101.55.66%A+/A-
IAG RESIANGReset pref12/16/20194.00%3.35%0.07%103.85.50%A+/BBB+
Macquarie BankMBLHBIncome SecPerpetual1.70%3.37%-0.03%76.45.52%A/BB+
MacquarieMBLPACapital Note03/24/20203.30%3.62%-0.13%99.45.87%A/-
MacquarieMQGPACapital Note06/19/20184.00%3.48%-0.24%101.35.73%A-/BBB-
Multiplex SITESMXUPAPerp'l PrefPerpetual3.90%4.98%-0.01%87.77.13%BB+/BB
Nat Aust BankNABHAIncome SecPerpetual1.25%2.82%-0.04%75.84.97%AA-/BBB
Nat Aust BankNABPAMCPS II03/20/20193.20%3.85%-0.10%98.86.00%AA-/BBB-
Nat Aust BankNABPBMCPS II12/17/20203.25%3.66%-0.33%97.85.81%AA-/BBB-
NufarmNFNGStep UpPerpetual3.90%5.11%0.09%86.417.36%BB /B+
PaperlinxPXUPAPerp'l Pref06/30/2052N/A8.80%0.00%911.05%N/A
Ramsay Health CareRHCPAPerp'l PrefPerpetual4.85%4.49%0.07%105.256.74%BBB/BB+
Suncorp-MetwaySBKHBIncome SecPerpetual0.75%2.17%0.04%764.32%A+/A-
SuncorpSUNPCMCPS II12/17/20174.65%3.70%0.07%103.565.85%A /BBB+
SuncorpSUNPEMCPS II06/17/20203.40%3.63%-0.23%98.75.78%A /BBB+
Seven Network TELYS 4SVWPAPerp'l Pref12/02/20544.75%6.30%0.04%83.658.55%BB+/BB-
WestpacWBCPCMCPS II03/31/20183.25%3.38%-0.10%100.525.63%AA-/BBB-
WestpacWBCPDMCPS II03/08/20193.20%3.74%-0.22%98.015.89%AA-/BBB-
WestpacWBCPEMCPS II09/23/20223.05%3.75%-0.12%96.95.90%AA-/BBB+
WestpacWCTPAStep Up06/30/20161.00%2.73%0.09%98.654.88%AA-/BBB

** 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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