20 August 2025

Summary –

The hybrid securities market continues to reflect investor appetite for yield in a stabilising rate environment, with trading margins and running yields showing notable dispersion across issuers and maturities. As of 20 August, several major banks have seen subtle but strategic shifts in pricing, offering insights into market sentiment and institutional positioning.

Major Bank Movements

  • Westpac (WBCPH, WBCPJ, WBCPL, WBCPK, WBCPM) Westpac’s hybrid suite remains active across the curve.
    • WBCPH (Capital Notes 5) is approaching its call date (22 Sep 2025) and trades at 100.452 with a running yield of 7.11%, reflecting strong demand and low volatility.
    • WBCPL and WBCPM show consistent pricing above par, with trading margins around 3.49%–2.83%, suggesting investor confidence in Westpac’s longer-term credit profile.
  • Commonwealth Bank (CBAPJ, CBAPI, CBAPL, CBAPK, CBAPM) CBA’s PERLS series continues to attract steady interest.
    • CBAPJ (PERLS 13) trades at 102.92 with a yield of 6.34%, while CBAPM (PERLS 16) offers 6.41%, indicating a modest premium for longer duration.
    • Margins across the series remain compressed, ranging from 2.39% to 3.10%, reinforcing CBA’s perceived stability.
  • National Australia Bank (NABPF, NABPH, NABPI, NABPJ, NABPK) NAB’s hybrids show a gradual decline in trading margins.
    • NABPF (Capital Notes 3) offers a margin of 4.71%, while newer issues like NABPK (Capital Notes 8) trade at 2.29%, highlighting the yield curve’s flattening effect.
    • Running yields remain competitive, averaging 6.28%–6.98% across the series.
  • ANZ Bank (AN3PI, AN3PJ, AN3PK, AN3PL) ANZ’s Capital Notes series reflects subdued margin movement.
    • Margins hover between 2.36% and 2.41%, with yields around 6.21%–6.48%, suggesting stable investor expectations and minimal credit spread volatility.
  • Macquarie Group & Bank (MBLPC, MQGPD, MQGPE, MQGPF, MQGPG) Macquarie’s hybrids continue to offer attractive spreads.
    • MBLPC (Capital Notes 2) trades at 101.95 with a yield of 8.38%, one of the highest among major banks.
    • Later maturities like MQGPG (Capital Notes 7) show tighter margins (2.61%) and yields around 6.19%, indicating a premium for shorter-term risk.

Yield Leaders & Outliers

  • Judo Capital (JDOPA) With a margin of 4.67% and a running yield of 9.55%, JDOPA remains the standout performer, reflecting both its higher credit risk and investor appetite for yield.
  • Latitude (LFSPA) Trading at 98.3, LFSPA offers a margin of 11.75% and a yield of 8.95%, positioning it as a high-yield option for risk-tolerant investors.

Market Sentiment & Strategy

The average trading margin across the hybrid universe sits at ~5.10%, with running yields averaging 6.97%. Investors appear to be recalibrating portfolios toward shorter maturities and higher-yielding instruments, while maintaining exposure to major bank issuers for stability.

As call dates approach for several 2025–2026 hybrids, expect increased turnover and potential price adjustments. Yield compression in longer-dated notes suggests a cautious optimism, with credit risk priced conservatively.

  • ASX-Listed Hybrids

    COMPANYCODEHYBRID TYPEMATURITY/
    CALL
    DATE    		MARGIN
    INCL. CREDITS    		TRADING
    MARGIN    		DAY
    CHANGE    		DAY
    CLOSE    		RUNNING
    YIELD**
    WestpacWBCPHCapital Notes 522/09/20253.20%73.51%3.03%100.4527.11%
    AMP GroupAMPPBCapital Notes 216/12/20254.50%8.87%0.11%102.28.19%
    Macquarie BankMBLPCCapital Notes 222/12/20254.70%8.66%0.09%101.958.38%
    ChallengerCGFPCCapital Notes 325/05/20264.60%8.71%0.05%101.668.41%
    Nat Aust BankNABPFCapital Notes 317/06/20264.00%4.71%0.03%103.17.61%
    SuncorpSUNPHCapital Notes 317/06/20263.00%4.76%0.03%101.8516.67%
    Macquarie GroupMQGPDCapital Notes 410/09/20264.15%3.62%0.02%103.97.68%
    CBACBAPJ PERLS 1320/10/20262.75%2.94%0.02%102.926.34%
    LatitudeLFSPACapital Notes27/10/20264.75%11.75%0.04%98.38.95%
    WestpacWBCPJCapital Notes 722/03/20273.40%4.66%0.02%103.667.09%
    CBACBAPI PERLS 1220/04/20273.00%3.10%0.01%103.136.58%
    Bank of QueenslandBOQPFCapital Notes 214/05/20273.80%4.92%0.02%102.997.49%
    Bendigo BankBENPHCapital Notes15/06/20273.80%3.34%0.01%104.457.31%
    Macquarie GroupMQGPECapital Notes 520/09/20272.90%2.83%0.01%102.986.46%
    Nat Aust BankNABPHCapital Notes 517/12/20273.50%2.89%0.01%104.86.98%
    ANZ BankAN3PICapital Notes 620/03/20283.00%2.40%0.01%103.9186.48%
    CBACBAPL PERLS 1515/06/20282.85%2.59%0.01%103.926.38%
    SuncorpSUNPICapital Notes 417/06/20282.90%3.08%0.01%102.916.49%
    WestpacWBCPLCapital Notes 922/09/20283.40%3.49%0.01%105.346.98%
    Macquarie BankMBLPDCapital Notes 37/12/20282.90%2.50%0.01%104.156.39%
    Bank of QueenslandBOQPGCapital Notes 315/12/20283.40%2.98%0.01%104.796.88%
    Judo CapitalJDOPACapital Notes16/02/20296.50%4.67%0.01%111.39.55%
    ANZ BankAN3PJCapital Notes 720/03/20292.70%2.41%0.00%103.46.21%
    ChallengerCGFPDCapital Notes 425/05/20293.60%3.44%0.01%104.767.12%
    CBACBAPK PERLS 1415/06/20292.75%2.47%0.01%104.196.26%
    IAGIAGPECapital Notes 215/06/20293.50%3.16%0.00%105.96.98%
    Macquarie GroupMQGPFCapital Notes 612/09/20293.70%2.55%0.01%107.156.99%
    Nat Aust BankNABPICapital Notes 617/09/20293.15%2.36%0.01%106.126.54%
    WestpacWBCPKCapital Notes 821/09/20292.90%3.13%0.01%104.5956.51%
    ANZ BankAN3PKCapital Notes 820/03/20302.75%2.38%0.00%103.956.23%
    CBACBAPM PERLS 1617/06/20303.00%2.39%0.00%105.786.41%
    SuncorpSUNPJCapital Notes 517/06/20302.80%2.74%0.00%103.66.34%
    Nat Aust BankNABPJCapital Notes 717/09/20302.80%2.49%0.00%104.616.28%
    Bendigo BankBENPiCapital Notes 213/12/20303.20%2.79%0.00%105.346.64%
    Insurance AustraliaIAGPFCapital Notes 315/12/20303.20%3.01%0.00%105.356.70%
    ANZ BankAN3PLCapital Notes 920/03/20312.90%2.36%0.00%105.0016.31%
    WestpacWBCPMCapital Notes 1022/09/20313.10%2.83%0.00%106.76.57%
    Macquarie GroupMQGPGCapital Notes 715/12/20312.65%2.61%0.00%103.226.19%
    Nat Aust BankNABPKCapital Notes 817/03/20322.60%2.29%0.00%104.836.06%

  • ASX-Listed Hybrids (Non-standard)

    COMPANYCODEBOND TYPECALL DATEISSUE MARGIN (inc frank)TRADING MARGINDAYCLOSING PRICE RUNNING YIELD
    NufarmNFNGStep UpPerpetual3.90%5.17%-0.01%89.78.75%
    Ramsay Health CareRHCPAPreference SharePerpetual4.85%4.56%0.00%108.058.14%