25 September 2025

Summary –

The Australian bank hybrid market continues to show resilience, with trading margins and running yields reflecting a stable investor appetite for income-generating instruments amid a cautious economic outlook.

Key Highlights:

  • Top Performing Hybrids by Running Yield:
    • Judo Capital (JDOPA) leads with a 9.56% running yield, supported by a high issue margin of 6.50% and a strong market price of $112.
    • Latitude (LFSPA) follows with a 9.04% yield, reflecting investor demand for higher-margin notes (4.75% issue margin).
    • AMP Group (AMPPB) and Macquarie Bank (MBLPC) also offer attractive yields above 8.4%, with short-term call dates in December 2025.
  • Major Bank Hybrids:
    • CBA’s PERLS series (CBAPJ, CBAPI, CBAPK, CBAPL, CBAPM) show consistent yields between 6.33% and 6.66%, with trading margins narrowing, indicating strong demand.
    • Westpac’s Capital Notes (WBCPJ, WBCPL, WBCPK, WBCPM) maintain yields in the 6.60%–7.21% range, with WBCPJ standing out due to its shorter call date and higher trading margin.
    • ANZ Bank hybrids (AN3PI to AN3PL) offer yields between 6.22% and 6.38%, with trading margins tightening across newer issues.
  • Trading Margin Trends:
    • Shorter-dated hybrids (e.g., AMPPB, MBLPC) exhibit higher trading margins (above 19%), reflecting proximity to call dates and potential capital return.
    • Longer-dated hybrids show compressed margins, especially among major banks, suggesting investor confidence in credit quality and stability.
  • Non-Standard Hybrids:
    • Ramsay Health Care (RHCPA) and Nufarm (NFNG) continue to trade well, with running yields of 8.15% and 8.73% respectively. These perpetual instruments offer attractive income but carry different risk profiles compared to bank-issued hybrids.

Market Sentiment & Outlook

The hybrid market remains buoyant, with investors favoring instruments offering stable income and moderate risk. The narrowing trading margins on longer-dated bank hybrids suggest renewed confidence in the sector’s creditworthiness, while higher yields on select instruments reflect opportunities for enhanced returns.

As interest rate expectations evolve, hybrid securities continue to play a pivotal role in diversified income portfolios.

 

Hybrids in major banks Australia other financials EX Major banks

  • COMPANYCODEHYBRID TYPEMATURITY/
    CALL
    DATE    		MARGIN
    INCL. CREDITS    		TRADING
    MARGIN    		DAY
    CHANGE    		DAY
    CLOSE    		RUNNING
    YIELD**
    ChallengerCGFPCCapital Notes 325-05-20264.60%9.10%0.06%102.668.37%
    Nat Aust BankNABPFCapital Notes 317-06-20264.00%8.13%0.05%101.77.75%
    SuncorpSUNPHCapital Notes 317-06-20263.00%7.79%0.05%100.726.76%
    Macquarie GroupMQGPDCapital Notes 410-09-20264.15%6.17%0.03%102.37.83%
    CBACBAPJ PERLS 1320-10-20262.75%5.63%0.03%1016.47%
    LatitudeLFSPACapital Notes27-10-20264.75%13.85%0.05%97.99.04%
    WestpacWBCPJCapital Notes 722-03-20273.40%6.25%0.02%102.57.20%
    CBACBAPI PERLS 1220-04-20273.00%4.24%0.02%102.256.65%
    Bank of QueenslandBOQPFCapital Notes 214-05-20273.80%5.07%0.02%103.737.47%
    Bendigo BankBENPHCapital Notes15-06-20273.80%4.62%0.02%103.277.42%
    Macquarie GroupMQGPECapital Notes 520-09-20272.90%3.51%0.01%102.46.50%
    Nat Aust BankNABPHCapital Notes 517-12-20273.50%3.99%0.01%103.47.10%
    ANZ BankAN3PICapital Notes 620-03-20283.00%3.16%0.01%102.796.55%
    CBACBAPL PERLS 1515-06-20282.85%3.45%0.01%102.626.47%
    SuncorpSUNPICapital Notes 417-06-20282.90%3.26%0.01%103.196.49%
    WestpacWBCPLCapital Notes 922-09-20283.40%4.05%0.01%104.757.04%
    Macquarie BankMBLPDCapital Notes 307-12-20282.90%3.22%0.01%102.86.48%
    Bank of QueenslandBOQPGCapital Notes 315-12-20283.40%3.48%0.01%104.26.94%
    Judo CapitalJDOPACapital Notes16-02-20296.50%4.78%0.01%1129.56%
    ANZ BankAN3PJCapital Notes 720-03-20292.70%2.62%0.00%103.36.22%
    ChallengerCGFPDCapital Notes 425-05-20293.60%3.75%0.01%104.637.15%
    CBACBAPK PERLS 1415-06-20292.75%2.99%0.01%103.36.32%
    IAGIAGPECapital Notes 215-06-20293.50%3.75%0.01%104.87.07%
    Macquarie GroupMQGPFCapital Notes 612-09-20293.70%2.95%0.01%106.497.05%
    Nat Aust BankNABPICapital Notes 617-09-20293.15%2.73%0.01%105.5996.59%
    WestpacWBCPKCapital Notes 821-09-20292.90%3.69%0.01%103.66.59%
    ANZ BankAN3PKCapital Notes 820-03-20302.75%2.66%0.00%103.4536.26%
    CBACBAPM PERLS 1617-06-20303.00%2.62%0.01%105.66.43%
    SuncorpSUNPJCapital Notes 517-06-20302.80%2.80%0.01%104.076.32%
    Nat Aust BankNABPJCapital Notes 717-09-20302.80%2.82%0.00%104.056.33%
    Bendigo BankBENPiCapital Notes 213-12-20303.20%3.19%0.01%104.56.72%
    Insurance AustraliaIAGPFCapital Notes 315-12-20303.20%3.34%0.00%104.666.75%
    ANZ BankAN3PLCapital Notes 920-03-20312.90%2.72%0.00%104.0286.37%
    WestpacWBCPMCapital Notes 1022-09-20313.10%3.25%0.00%105.656.66%
    Macquarie GroupMQGPGCapital Notes 715-12-20312.65%2.70%0.00%103.46.19%
    Nat Aust BankNABPKCapital Notes 817-03-20322.60%2.56%0.00%104.26.11%
  • COMPANYCODEBOND TYPECALL DATEISSUE MARGIN (inc frank)TRADING MARGIN?DAYCLOSING PRICE RUNNING YIELD
    NufarmNFNGStep UpPerpetual3.90%5.17%0.00%90.58.72%
    Ramsay Health CareRHCPAPreference SharePerpetual4.85%4.59%0.00%108.6398.14%