The fixed interest desk at Bell Potter started the week with a recommendation for holders of Suncorp CPS 3 (ASX code: SUNPE) to switch to Bendigo & Adelaide Bank CPS 2 (ASX code: BENPE). Call dates for each are in 2020; Suncorp’s is in June while Bendigo’s is in November 2020. However, one has a yield at the top of those on offer and the other has a yield which is towards the bottom of the range. Suncorp is the larger institution and its senior debt is rated “A” by S&P Global while Bendigo’s senior debt rating is “A-“.
At the close of trading on 10 October, below is a chart which shows how they and other non-major bank hybrids looked. It is not hard to see why it caught Bell’s interest.
*To call date. Assumes BBSW unchanged. Includes franking credits, capital gain/loss.