2 Nov – 6 Nov 2015

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On average, ASX-listed corporate bond margins continued to fall, albeit at a subdued pace. Average yields, as measured by the trading margins, fell to 2.58% across the ASX-listed floating rate notes and bonds in the YieldReport survey. This compares with the 2.62% trading margin at the end of October and the 2.86% at the end of September.

ASX-listed floating rate hybrids were the opposite and margins plumped up a little. The average ASX-listed floating rate hybrid margin at the end of the week was 4.39%, up from the end of October’s 4.31%, but still below the end of September’s when the average trading margin was 4.48%.

Shaw hybrids chart

Last week YieldReport published a chart of the major banks’ trading margins, with NABPA and WBCPD standing out from the pack. This week we’ve included a diagram from a different source, this time of issuers who are not major banks.

Hybrid issuers were also spooked this week by a change to the way S&P views the securities. Previously the securities were considered to be 50% debt and 50% equity. This will no longer be the case. Read more here.

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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%4.01%0.47%100.056.20%
ANZ Banking GroupANZPCMCPS II28/09/20173.10%3.65%-0.28%99.985.91%
ANZ Banking GroupANZPDMCPS II1/09/20213.40%4.44%0.01%96.306.70%
ANZ Banking GroupANZPECapital Note24/03/20223.25%4.54%-0.09%94.996.80%
Bendigo BankBENHBPerpetual21/10/20541.00%3.01%0.03%70.015.20%
Bendigo BankBENPDMCPS II13/12/20175.00%4.35%0.03%104.106.61%
Bendigo BankBENPEMCPS II30/11/20203.20%4.50%-0.39%96.506.76%
Bendigo BankBENPFMCPSII15/06/20214.00%4.66%0.04%99.406.92%
Bank Of QueenslandBOQPDMCPS II15/04/20185.10%3.86%0.08%103.106.12%
CBA PERLS 3PCAPAStep Up6/04/20161.05%3.52%-0.08%198.445.71%
CBA PERLS 6CBAPCMCPS II15/12/20183.80%3.88%-0.08%100.556.07%
CBA PERLS 7CBAPDMCPS II15/12/20222.80%4.44%-0.12%92.506.63%
ChallengerCGFPACapital Note25/05/20203.40%4.59%-0.11%96.506.78%
IAGIAGPCMCPS II1/05/20174.00%3.18%-0.56%101.095.44%
IAG RESIANGReset pref16/12/20194.00%4.35%-0.11%101.196.54%
Macquarie BankMBLHBIncome SecPerpetual1.70%3.97%0.08%69.616.16%
MacquarieMBLPACapital Note24/03/20213.30%4.35%-0.01%95.806.61%
MacquarieMQGPACapital Note7/06/20194.00%4.44%-0.04%100.676.70%
Multiplex SITESMXUPAPerp'l PrefPerpetual3.90%6.03%0.10%78.308.22%
Nat Aust BankNABHAIncome SecPerpetual1.25%3.41%0.01%68.595.60%
Nat Aust BankNABPAMCPS II20/03/20193.20%4.18%-0.50%97.506.37%
Nat Aust BankNABPBMCPS II17/12/20203.25%4.36%-0.13%96.006.55%
NufarmNFNGStep UpPerpetual3.90%5.46%-0.02%82.007.72%
PaperlinxPXUPAPerp'l Pref30/06/2052N/A8.80%0.00%13.0011.06%
Ramsay Health CareRHCPAPerp'l PrefPerpetual4.85%4.60%0.01%103.506.86%
Suncorp-MetwaySBKHBIncome SecPerpetual0.75%2.13%-0.01%77.004.32%
SuncorpSUNPCMCPS II17/12/20174.65%3.60%-0.14%102.565.79%
SuncorpSUNPEMCPS II17/06/20203.40%4.29%0.36%97.706.48%
Seven Network TELYS 4SVWPAPerp'l Pref2/12/20544.75%8.45%0.07%70.9010.71%
WestpacWBCPCMCPS II31/03/20183.25%3.94%0.23%98.956.20%
WestpacWBCPDMCPS II8/03/20193.20%4.22%-0.23%98.006.41%
WestpacWBCPEMCPS II22/09/20223.05%4.53%0.18%92.456.72%
WestpacWCTPAStep Up30/06/20161.00%3.29%-0.23%98.905.48%

** 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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