07 Dec – 11 Dec 2015

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The Australian Unity Series B Bonds offer closed after taking more than the amount sought. The floating rate bonds pay interest at the 90 day bank bill rate + 280bps and they will start trading on the ASX on Wednesday 16 December.

Hybrid trading margins resumed their rises after a recent pause. The average trading margin of ASX-listed floating rate notes and bonds in the YieldReport survey increased again this week, from 3.17% to 3.27% and it is markedly higher than 2.62% average trading margin at the end of October and the 2.86% recorded at the end of September.

ASX-listed floating rate hybrid margins followed suit. The average hybrid trading margin at the end of the week was 4.89%, up from 4.70%. This average of the trading margins is now well above the end of October’s 4.31%, as well as above the average at the end of September when the average trading margin was 4.48%.

One of YieldReport’s favourite charts is of the type shown below. At a glance the outliers can be identified for further analysis. Alas, this time nothing really stands out, although it is clear where an investor’s focus should be.

hybrids
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ASX-LISTED HYBRIDS

COMPANYCODEHYBRID
TYPE
MATURITY
OR STEP-UP
DATE
MARGIN
INC FRANK
TRADING
MARGIN
∆ WEEKWEEK
CLOSE
YTM
Est**
ANZ Banking GroupANZPAMCPS I16/12/20163.10%3.49%0.73%99.545.84%
ANZ Banking GroupANZPCMCPS II28/09/20173.10%4.56%0.16%99.177.02%
ANZ Banking GroupANZPDMCPS II1/09/20213.40%5.06%0.14%94.027.52%
ANZ Banking GroupANZPECapital Note24/03/20223.25%5.20%0.24%91.707.66%
Bendigo BankBENHBPerpetual21/10/20541.00%3.16%0.00%68.105.51%
Bendigo BankBENPDMCPS II13/12/20175.00%4.86%0.19%100.207.32%
Bendigo BankBENPEMCPS II30/11/20203.20%5.10%0.13%92.447.56%
Bendigo BankBENPFMCPSII15/06/20214.00%5.05%0.24%95.307.51%
Bank Of QueenslandBOQPDMCPS II16/04/20185.10%5.15%0.30%101.057.61%
CBA PERLS 3PCAPAStep Up6/04/20161.05%4.71%1.22%198.917.06%
CBA PERLS 6CBAPCMCPS II15/12/20183.80%4.19%-0.08%98.856.54%
CBA PERLS 7CBAPDMCPS II15/12/20222.80%5.03%0.12%88.007.38%
ChallengerCGFPACapital Note25/05/20203.40%4.65%-0.43%95.507.00%
IAGIAGPCMCPS II1/05/20174.00%4.59%0.18%99.907.05%
IAG RESIANGReset pref16/12/20194.00%4.58%0.14%97.906.93%
Macquarie BankMBLHBIncome SecPerpetual1.70%3.99%-0.04%70.006.34%
MacquarieMBLPACapital Note24/03/20203.30%4.89%-0.01%94.357.35%
MacquarieMQGPACapital Note19/06/20184.00%4.24%-0.53%98.986.70%
Multiplex SITESMXUPAPerp'l PrefPerpetual3.90%6.67%-0.05%73.009.02%
Nat Aust BankNABHAIncome SecPerpetual1.25%3.35%-0.04%69.885.70%
Nat Aust BankNABPAMCPS II20/03/20193.20%5.01%0.59%94.627.36%
Nat Aust BankNABPBMCPS II17/12/20203.25%5.40%0.94%91.107.75%
NufarmNFNGStep UpPerpetual3.90%5.78%0.00%80.318.24%
PaperlinxPXUPAPerp'l Pref30/06/2052N/A8.80%0.00%11.0011.26%
Ramsay Health CareRHCPAPerp'l PrefPerpetual4.85%4.72%0.05%102.567.18%
Suncorp-MetwaySBKHBIncome SecPerpetual0.75%2.18%-0.02%76.094.53%
SuncorpSUNPCMCPS II17/12/20174.65%4.32%-0.37%100.496.67%
SuncorpSUNPEMCPS II17/06/20203.40%5.07%0.29%93.577.42%
Seven Network TELYS 4SVWPAPerp'l Pref2/12/20544.75%9.52%0.34%62.4011.98%
WestpacWBCPCMCPS II31/03/20183.25%4.97%0.65%97.507.43%
WestpacWBCPDMCPS II8/03/20193.20%4.46%0.50%96.406.81%
WestpacWBCPEMCPS II23/09/20223.05%4.92%0.30%90.007.27%
WestpacWCTPAStep Up30/06/20161.00%3.80%0.36%98.306.15%

** 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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