31 July 2025

Summary:

Market Highlights

Major bank hybrids remain at the core of Australian investors’ income portfolios, standing out for consistent yields, strong credit quality, and stable pricing. The new financial year began with further yield resilience and robust investor demand.

• Steady High Yields: Major bank hybrids currently offer running yields between 6.4% and 8.5%, with Macquarie’s MBLPC leading at 8.47%, reflective of ongoing competitive pressure among top issuers.
• Premium Pricing: Most securities continue to trade above face value, reinforcing investor confidence and sector stability.
• Trading Margins Evolve: Trading margins for the top five banks range between 2.6% and 4.6%, with a sharp uptick on securities approaching their call/maturity date. Notably, Westpac’s WBCPH displays a standout trading margin above 40% as it nears its call date, underscoring short-term tactical opportunities for higher yield seekers.
• Yield Compression on New Issues: Newer, longer-dated hybrids from major banks are seeing running yields and trading margins compress as strong demand continues to outpace new supply.

Market Perspective

The start of the 2025/26 financial year has seen bank hybrid securities retain their premium status for yield-oriented investors. Macquarie, NAB, and Westpac now lead in headline yields, while CBA and ANZ showcase stable pricing and reliable income potential. The overall market tone reflects demand for both security and dependable returns in a low-growth environment.

Key Takeaways for Investors:

• Income Power: Top 5 bank hybrids remain a reliable source of regular, higher-than-cash income, with robust credit support from Australia’s largest financial institutions.

• Tactical Yield Plays: Hybrids nearing their call dates present elevated yields but come with reinvestment timing risks—active monitoring is essential.

• Stable, Liquid Market: Ongoing premium-to-par pricing and deep liquidity underline the sector’s role as a portfolio cornerstone.

 

 

• COMPANY	CODE	HYBRID TYPE	MATURITY/ CALL DATE	MARGIN INCL. CREDITS	TRADING MARGIN	DAY CHANGE	DAY CLOSE	RUNNING YIELD**
  Westpac	WBCPH	Capital Notes 5	22/09/2025	3.20%	40.88%	-0.06%	100.21	7.23%
  AMP Group	AMPPB	Capital Notes 2	16/12/2025	4.50%	8.14%	0.03%	101.8	8.30%
  Macquarie Bank	MBLPC	Capital Notes 2	22/12/2025	4.70%	6.93%	-0.95%	101.98	8.47%
  Challenger	CGFPC	Capital Notes 3	25/05/2026	4.60%	4.70%	-0.66%	103.95	8.30%
  Nat Aust Bank	NABPF	Capital Notes 3	17/06/2026	4.00%	4.57%	0.08%	102.74	7.73%
  Suncorp	SUNPH	Capital Notes 3	17/06/2026	3.00%	4.60%	-0.08%	101.5	6.78%
  Macquarie Group	MQGPD	Capital Notes 4	10/09/2026	4.15%	3.03%	0.10%	104.15	7.75%
  CBA	CBAPJ	PERLS 13	20/10/2026	2.75%	3.59%	0.06%	101.8	6.51%
  Latitude	LFSPA	Capital Notes	27/10/2026	4.75%	10.87%	-0.06%	98.4	9.02%
  Westpac	WBCPJ	Capital Notes 7	22/03/2027	3.40%	4.65%	0.03%	103.2	7.22%
  CBA	CBAPI	PERLS 12	20/04/2027	3.00%	3.14%	-0.03%	102.67	6.71%
  Bank of Queensland	BOQPF	Capital Notes 2	14/05/2027	3.80%	4.90%	0.30%	102.51	7.61%
  Bendigo Bank	BENPH	Capital Notes	15/06/2027	3.80%	3.48%	-0.14%	103.8	7.45%
  Macquarie Group	MQGPE	Capital Notes 5	20/09/2027	2.90%	3.01%	0.08%	102.31	6.60%
  Nat Aust Bank	NABPH	Capital Notes 5	17/12/2027	3.50%	2.86%	-0.12%	104.48	7.09%
  ANZ Bank	AN3PI	Capital Notes 6	20/03/2028	3.00%	2.61%	0.15%	103.17	6.63%
  CBA	CBAPL	PERLS 15	15/06/2028	2.85%	2.78%	0.30%	103.09	6.52%
  Suncorp	SUNPI	Capital Notes 4	17/06/2028	2.90%	3.00%	-0.04%	102.7	6.60%
  Westpac	WBCPL	Capital Notes 9	22/09/2028	3.40%	3.65%	0.18%	104.5	7.12%
  Macquarie Bank	MBLPD	Capital Notes 3	7/12/2028	2.90%	2.73%	-0.21%	103.2	6.55%
  Bank of Queensland	BOQPG	Capital Notes 3	15/12/2028	3.40%	2.97%	-0.17%	104.41	7.00%
  Judo Capital	JDOPA	Capital Notes	16/02/2029	6.50%	4.03%	0.01%	112.55	9.50%
  ANZ Bank	AN3PJ	Capital Notes 7	20/03/2029	2.70%	2.62%	-0.01%	102.5	6.37%
  Challenger	CGFPD	Capital Notes 4	25/05/2029	3.60%	3.09%	-0.13%	105.38	7.16%
  CBA	CBAPK	PERLS 14	15/06/2029	2.75%	2.56%	-0.15%	103.53	6.39%
  IAG	IAGPE	Capital Notes 2	15/06/2029	3.50%	3.42%	0.01%	104.77	7.16%
  Macquarie Group	MQGPF	Capital Notes 6	12/09/2029	3.70%	2.81%	0.01%	105.96	7.17%
  Nat Aust Bank	NABPI	Capital Notes 6	17/09/2029	3.15%	2.76%	0.03%	104.41	6.74%
  Westpac	WBCPK	Capital Notes 8	21/09/2029	2.90%	3.30%	0.00%	103.63	6.66%
  ANZ Bank	AN3PK	Capital Notes 8	20/03/2030	2.75%	2.61%	-0.04%	102.86	6.40%
  CBA	CBAPM	PERLS 16	17/06/2030	3.00%	2.50%	-0.05%	105.001	6.55%
  Suncorp	SUNPJ	Capital Notes 5	17/06/2030	2.80%	2.68%	-0.11%	103.44	6.45%
  Nat Aust Bank	NABPJ	Capital Notes 7	17/09/2030	2.80%	2.49%	-0.06%	104.24	6.40%
  Bendigo Bank	BENPi	Capital Notes 2	13/12/2030	3.20%	2.73%	-0.07%	105.18	6.75%
  Insurance Australia	IAGPF	Capital Notes 3	15/12/2030	3.20%	3.11%	-0.09%	104.64	6.85%
  ANZ Bank	AN3PL	Capital Notes 9	20/03/2031	2.90%	2.48%	-0.06%	104.21	6.46%
  Westpac	WBCPM	Capital Notes 10	22/09/2031	3.10%	2.96%	0.08%	105.75	6.73%
  Macquarie Group	MQGPG	Capital Notes 7	15/12/2031	2.65%	2.60%	-0.01%	102.95	6.31%
  Nat Aust Bank	NABPK	Capital Notes 8	17/03/2032	2.60%	2.50%	0.09%	103.5	6.24%

• COMPANY	CODE	BOND TYPE	CALL DATE	ISSUE MARGIN (inc frank)	TRADING MARGIN	?DAY	CLOSING PRICE	RUNNING YIELD
  Nufarm	NFNG	Step Up	Perpetual	3.90%	5.33%	0.09%	87.51	9.03%
  Ramsay Health Care	RHCPA	Preference Share	Perpetual	4.85%	4.51%	0.02%	107.6	8.22%