January 2016

Share

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Unlike the ASX-listed notes and bond arena, there were no stock-specific issues to blow margins out in the listed hybrids arena in January. However, while average trading margins for listed notes fell once the two Crown series are removed from the calculations, trading margins for hybrids increased by around 60bps on average.

The largest moves in trading margins were from Westpac Trust Preference June 2016 step up (+1.09%), followed by Seven Network’s reset preference share (+1.05%) and, perhaps a little on the surprising side, ANZ CPS 2 (+1.05%) which has a call date in September 2017. Floating rate hybrids are often preference shares with a fixed face value and are viewed as being more connected to the issuers’ ordinary shares than listed floating rate notes, even when the notes have similar Basel III conversion clauses.
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ASX LISTED HYBRIDS

COMPANYCODEHYBRID
TYPE
MATURITY
OR STEP-UP
DATE
MARGIN
INC FRANK
TRADING
MARGIN
∆ MONTHMONTH
CLOSE
YTM
Est**
ANZ Banking GroupANZPAMCPS I16/12/20163.10%3.06%0.51%100.675.35%
ANZ Banking GroupANZPCMCPS II28/09/20173.10%4.27%1.05%100.506.68%
ANZ Banking GroupANZPDMCPS II1/09/20213.40%5.23%0.42%94.207.64%
ANZ Banking GroupANZPECapital Note24/03/20223.25%5.12%0.08%92.907.53%
Bendigo BankBENHBPerpetual21/10/20541.00%2.94%-0.05%70.005.23%
Bendigo BankBENPDMCPS II13/12/20175.00%4.95%0.25%101.007.36%
Bendigo BankBENPEMCPS II30/11/20203.20%5.71%0.68%91.008.12%
Bendigo BankBENPFMCPS II15/06/20214.00%5.57%0.82%94.007.98%
Bank Of QueenslandBOQPDMCPS II15/04/20185.10%4.31%-0.06%103.756.72%
CBA PERLS 3PCAPAStep Up6/04/20161.05%2.52%0.25%199.314.81%
CBA PERLS 6CBAPCMCPS II15/12/20183.80%3.93%0.34%100.406.22%
CBA PERLS 7CBAPDMCPS II15/12/20222.80%5.34%0.49%87.257.63%
ChallengerCGFPACapital Note25/05/20203.40%5.43%0.69%93.597.72%
IAGIAGPCMCPS II1/05/20174.00%4.17%0.09%101.306.58%
IAG RESIANGReset pref16/12/20194.00%4.48%0.15%99.146.77%
Macquarie BankMBLHBIncome SecPerpetual1.70%4.03%0.14%68.106.32%
MacquarieMBLPACapital Note24/03/20213.30%5.16%0.30%94.157.57%
MacquarieMQGPACapital Note7/06/20194.00%4.52%0.38%99.006.93%
Multiplex SITESMXUPAPerp'l PrefPerpetual3.90%6.60%0.28%72.058.89%
Nat Aust BankNABHAIncome SecPerpetual1.25%3.46%0.02%67.255.75%
Nat Aust BankNABPAMCPS II20/03/20193.20%5.07%0.86%95.357.36%
Nat Aust BankNABPBMCPS II17/12/20203.25%5.13%0.29%93.007.42%
NufarmNFNGStep UpPerpetual3.90%5.63%0.12%82.008.04%
PaperlinxPXUPAPerp'l Pref30/06/2052N/A8.80%0.00%11.0011.21%
Ramsay Health CareRHCPAPerp'l PrefPerpetual4.85%4.80%0.17%102.607.21%
Suncorp-MetwaySBKHBIncome SecPerpetual0.75%2.14%0.03%76.094.43%
SuncorpSUNPCMCPS II17/12/20174.65%4.42%0.90%101.206.71%
SuncorpSUNPEMCPS II17/06/20203.40%4.23%-0.80%97.506.52%
Seven Network TELYS 4SVWPAPerp'l Pref2/12/20544.75%10.79%1.14%56.8013.20%
WestpacWBCPCMCPS II31/03/20183.25%4.86%0.77%98.657.27%
WestpacWBCPDMCPS II8/03/20193.20%4.48%-0.12%97.206.77%
WestpacWBCPEMCPS II22/09/20223.05%5.08%0.09%90.007.37%
WestpacWCTPAStep Up30/06/20161.00%2.20%1.19%99.734.49%

** 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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