June 2015

Share on LinkedInTweet about this on TwitterEmail this to someonePrint this page

[private role=’subscriber’]

Buffet takes 3.7% stake in IAG, forms partnership
Warren Buffet’s Berkshire Hathaway purchased a 3.7% stake in IAG for $500m and is, in essence, forming an 20/80 joint venture with the general insurance company. While seen as a vote of confidence in the company, IAG’s two hybrids, IAGPC and IANG gave back much of the announcement day’s price rise in subsequent trading.

Bendigo’s new hybrid holders suffer first day losses
Bendigo and Adelaide Bank’s latest hybrid offering (BENPF), the Converting Preference Share 3, debuted below its issue price. The hybrids were issued at 180d BBSW + 400bps and are callable in 2021 with a mandatory exchange date in 2023. Investors were sitting on a paper loss of 1.40% at the end of day 1 after the hybrids closed at $98.60.

Heritage Bank new style tier 2 notes
Heritage Bank issued $50m of a new style wholesale tier 2, Basel III compliant notes at BBSW + 350bps. The notes are callable in 2020, have a final maturity date in 2025, are subordinated and contain non-viability triggers in line with Basel III requirements. The new style of hybrid relates to the fact that the notes do not convert into equity in the event that APRA declares the bank non-viable. Rather, the notes will be written off and investors will lose their investment completely. The complexity of this relates to the fact that Heritage is a mutual with no shareholders – it is owned by its depositors. The situation shares some characteristics with the ME Bank issue in August 2014. That tier 2 issue was priced at BBSW + 270 bps and trades lower today. In the event of a non-viability clause being triggered, the ME Bank issue converts to non-voting, unlisted shares at a price determined by a book value test.

[/private]

[private role=’subscriber’]

ASX LISTED HYBRIDS

COMPANYCODEHYBRID
TYPE
MATURITY OR
STEP-UP DATE
MARGIN
INC FRANK
TRADING
MARGIN
∆ MonthMONTH
CLOSE
YTM Est**S&P CREDIT
RATING
COMP/HYBRID
ANZ Banking GroupANZPAMCPS I16/12/20163.10%2.84%0.17%100.504.98%AA-/BBB
ANZ Banking GroupANZPCMCPS II28/09/20173.10%3.92%0.37%100.056.17%AA-/BBB+
ANZ Banking GroupANZPDMCPS II1/09/20213.40%4.17%0.29%97.996.42%AA-/BBB+
ANZ Banking GroupANZPECapital Note24/03/20223.25%4.37%0.47%95.516.62%AA-/
Bendigo BankBENHBPerpetual30/09/20541.00%2.67%0.22%75.004.81%A-/BBB
Bendigo BankBENPDMCPS II13/12/20175.00%4.02%0.78%102.456.27%A-/BBB-
Bendigo BankBENPEMCPS II30/11/20203.20%4.41%0.28%95.006.66%n/a
Bank Of QueenslandBOQPDMCPS II15/04/20185.10%3.70%0.18%105.005.95%BBB+/BB+
CBA PERLS 3PCAPAStep Up6/04/20161.05%2.84%0.02%197.104.98%AA-/BBB
CBA PERLS 6CBAPCMCPS II15/12/20183.80%3.84%0.68%100.055.98%AA-/BBB-
CBA PERLS 7CBAPDMCPS II15/12/20222.80%4.46%0.65%90.756.60%AA-/BBB-
ChallengerCGFPACapital Note25/05/20203.40%4.80%0.66%94.806.94%n/a
EldersELDPAPerp'l Pref30/06/2051n/a0.00%0.00%74.500.00%n/a
IAGIAGPCMCPS II1/05/20174.00%3.63%0.21%101.605.88%A+/A-
IAG RESIANGReset pref16/12/20194.00%3.25%-0.10%103.105.39%A+/BBB+
Macquarie BankMBLHBIncome SecPerpetual1.70%3.86%0.50%71.506.00%A/BB+
MacquarieMBLPACapital Note24/03/20213.30%4.03%0.41%98.006.28%n/a
MacquarieMQGPACapital Note7/06/20194.00%3.69%0.22%101.005.94%A-/BBB-
Multiplex SITESMXUPAPerp'l PrefPerpetual3.90%5.41%0.42%83.007.55%BB+/BB
Nat Aust BankNABHAIncome SecPerpetual1.25%3.32%0.50%71.505.46%AA-/BBB
Nat Aust BankNABPAMCPS II20/03/20193.20%4.18%0.33%96.876.32%AA-/BBB-
Nat Aust BankNABPBMCPS II17/12/20203.25%4.19%0.53%95.916.33%AA-/BBB-
NufarmNFNGStep UpPerpetual3.90%5.46%0.36%84.007.71%BB /B+
PaperlinxPXUPAPerp'l Pref30/06/2052n/a8.80%0.00%6.9011.05%n/a
Ramsay Health CareRHCPAPerp'l PrefPerpetual4.85%4.75%0.26%102.507.00%BBB/BB+
Suncorp-MetwaySBKHBIncome SecPerpetual0.75%2.27%0.10%76.054.41%A+/A-
SuncorpSUNPCMCPS II17/12/20174.65%3.98%0.28%101.706.12%A /BBB+
SuncorpSUNPEMCPS II17/06/20203.40%4.26%0.63%96.586.40%A /BBB+
Seven Network TELYS 4SVWPAPerp'l Pref2/12/20544.75%7.33%1.02%76.669.58%BB+/BB-
WestpacWBCPCMCPS II31/03/20183.25%3.77%0.40%99.996.02%AA-/BBB-
WestpacWBCPDMCPS II8/03/20193.20%4.03%0.29%97.556.17%AA-/BBB-
WestpacWBCPEMCPS II22/09/20223.05%4.02%0.27%94.606.16%AA-/BBB+
WestpacWCTPAStep Up30/06/20161.00%3.08%0.35%97.935.22%AA-/BBB

[/private]