Summary: Trading margins move in mixed fashion; Peet, Qube stand out; Crown notes not being redeemed on July 2021 call date.
Trading margins of ASX-listed notes and bonds moved in a mixed fashion this week. The trading margin of Peet Bonds (ASX code: PPCHB, +212bps) reversed the previous two weeks’ falls over the week while the margin of Qube Subordinated Notes (ASX code: QUBHA, -31bps) had another noticeable decline.
NB: Crown will not be redeeming its Subordinated Notes II (ASX code: CWNHB) on the July 2021 call date. Crown has stated it “intends to review the role of CWNHB in its capital structure in around 12 months’ time, at which point Crown expects to have improved certainty on its operational and regulatory position.”
Crown Subordinated Notes 2 (ASX code: CWNHB) are not displayed.
The current 3-month BBSW rate is just a few basis points above zero. Add the trading margin from the above chart or from the tables to this figure for an estimate of the 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.
ASX-LISTED FLOATING RATE NOTES
| COMPANY | CODE | BOND TYPE | MATURITY | ISSUE MARGIN | TRADING MARGIN | Δ WEEK | WEEK CLOSE | RUNNING YIELD** |
|---|---|---|---|---|---|---|---|---|
| Crown | CWNHB | Sub. Note | 23-Jul-21 | 4.00% | 19.29% | -2.55% | 98.00 | 4.11% |
| Omni Bridgeway | OBLHA | Bond | 31-Jan-22 | 4.20% | 4.81% | -1.41% | 100.30 | 4.25% |
| Centuria Capital | C2FHA | Sec. Note | 20-Apr-26 | 4.25% | 5.22% | 2.16% | 100.11 | 4.71% |
| Peet | PPCHB | Bond | 5-Oct-22 | 3.65% | 1.52% | 0.07% | 101.97 | 2.20% |
| Nat. Aust. Bank | NABPE | Sub. Note Tier 2 | 20-Jun-23 | 2.20% | 2.18% | -0.31% | 104.50 | 3.78% |
| Qube Holdings | QUBHA | Sub. Note | 5-Oct-23 | 3.90% | 3.15% | -0.03% | 104.00 | 4.14% |
| Australian Unity | AYUHC | Bond Series C | 15-Dec-24 | 2.00% | 2.40% | 0.01% | 99.00 | 2.06% |
| Australian Unity | AYUHD | Bond Series D | 15-Dec-26 | 2.15% | 2.46% | 0.24% | 98.85 | 2.21% |