Trading margins of ASX-listed notes and bonds slipped this week and the median trading margin fell from 1.75% to 1.49%. Excluding securities which are close to maturity, the fall in the median margin was driven by Villa World Notes (ASX code: VLWHA, -106bps), Crown Notes 1 (ASX code: CWNHA, -34bps) and Australian Unity bonds (ASX code: AYUHB,-34bps) while Suncorp Notes (ASX code: SUNPD, +35bps) had the largest move in the opposite direction.
With respect to Villa World Notes, the movement was caused by one transaction. Villa World’s notes are not liquid and the large fall in the trading margin was due to an over-eager bidder.
N.B. Charts of ASX-listed notes are now no longer divided by Financial/Non-financial categories.
The current 3 month BBSW rate is around 1.69%. Add the trading margin from the above chart or from the tables to 1.69% for a gross return per annum in the absence of BBSW rate changes. The gross return may contain imputation credits. BBSW typically is around 15bps (average since 1990) more than the RBA rate.
| COMPANY $100 Face Val | CODE | BOND TYPE | MATURITY | ISSUE MARGIN | TRADING MARGIN | Δ WEEK | WEEK CLOSE | RUNNING YIELD** |
|---|---|---|---|---|---|---|---|---|
| AGL | AGLHA | Sub Note | 8-Jun-19 | 3.80% | 1.89% | 0.05% | 103.76 | 5.33% |
| AMP | AMPHA | Sub Note II | 18-Dec-18 | 2.65% | 0.52% | 0.18% | 102.89 | 4.24% |
| APT Pipelines | AQHHA | Sub Note | 31-Mar-18 | 4.50% | 1.13% | -0.97% | 101.89 | 6.10% |
| Australian Unity | AYUHB | Unsub. Bond | 15-Dec-20 | 2.80% | 1.17% | -0.29% | 104.90 | 4.29% |
| Crown | CWNHA | Sub Note | 14-Sep-18 | 5.00% | 3.21% | -0.34% | 102.40 | 6.58% |
| Crown | CWNHB | Sub Note | 23-Jul-21 | 4.00% | 4.53% | 0.04% | 99.30 | 5.77% |
| Bentham IMF | IMFHA | Bond | 30-Jun-19 | 4.20% | 1.95% | 0.20% | 103.95 | 5.68% |
| Nat Aust Bank | NABPE | Sub Note T2 | 20-Jun-23 | 2.20% | 1.42% | -0.14% | 104.39 | 3.74% |
| Qube Holdings | QUBHA | Sub Note | 5-Oct-23 | 3.90% | 3.63% | 0.03% | 106.80 | 5.25% |
| Suncorp-Metway | SUNPD | Sub NoteI T2 | 21-Nov-18 | 2.85% | 1.48% | 0.35% | 102.29 | 4.47% |
| Tatts | TTSHA | Snr. Bond | 5-Jul-19 | 3.10% | 1.49% | 0.20% | 102.94 | 4.67% |
| Villa World | VLWHA | Snr. Bond | 21-Apr-22 | 4.75% | 3.07% | -1.06% | 103.20 | 6.05% |
| Westpac | WBCHB | Sub Note T2 | 22-Aug-18 | 2.30% | 1.17% | 0.12% | 101.66 | 3.95% |