Summary: Corporate bond spreads about 4bps tighter on average; swap spreads widen; iTraxx up 5.80 points; domestic issuance volume falls back again; kangaroo market volumes pick up.
Corporate spreads finished the week about 4bps tighter on average as corporate yields generally lagged the modest declines of their Commonwealth counterparts. The majority of spreads’ week-on-week changes at the individual level were within a range of -8bps to +6bps and there were particularly notable exceptions apart from a couple of very short-dated lines.
One of the two other main measures of corporate risk, swap-to-bond spreads, widened along its curve. The other measure, credit default swap premiums, increased. The Australian credit default swap index, the iTraxx Australia Series 37, finished 5.80 points higher at 103.00 points.
Volumes in the primary market for corporate bonds and notes fell back again in the absence of any major bank issuance. $2.75 billion worth of bonds or notes were priced by local entities or their subsidiaries, whereas in the previous week issuance amounted to $5.0 billion. There was one asset-backed transaction which accounted for $250 million of the $2.75 billion.
Kangaroo market volumes picked up to above average levels. $1 billion worth of bonds or notes were issued, up from the previous week’s $700 million.
In ratings news, S&P revised Computershare’s outlook from “negative” to” stable” on the back of significantly higher EBITDA forecasts. Computershare senior debt is rated “BBB”.
Interested readers can find the week’s bond transactions in our tables via the link below.
| ISSUER | MATURITY | COUPON (%) | RATING | WEEK HIGH | WEEK LOW | CLOSING YIELD | Δ WEEK | Δ MONTH |
|---|---|---|---|---|---|---|---|---|
| Optus | 23-Aug-22 | 3.25 | A | 2.24 | 2.11 | 2.11 | -0.15 | -0.07 |
| Apple Inc | 28-Aug-22 | 3.70 | AA+ | 2.28 | 2.10 | 2.28 | 0.19 | 0.26 |
| Wells Fargo | 7-Sep-22 | 5.25 | A- | 2.70 | 2.47 | 2.69 | 0.24 | 0.29 |
| Melbourne Airport | 15-Sep-22 | 4.00 | BBB+ | 2.57 | 2.47 | 2.57 | 0.04 | 0.03 |
| Telstra | 16-Sep-22 | 4.00 | A | 2.51 | 2.41 | 2.51 | -0.03 | -0.05 |
| Stockland | 23-Nov-22 | 4.50 | A- | 2.54 | 2.39 | 2.54 | 0.06 | 0.23 |
| ANZ | 16-Aug-23 | 5.00 | AA- | 3.73 | 3.61 | 3.72 | -0.05 | -0.06 |
| Transpower NZ | 28-Aug-23 | 5.75 | AA- | 3.75 | 3.61 | 3.74 | -0.05 | 0.03 |
| Mirvac Finance | 18-Sep-23 | 3.50 | BBB+ | 4.00 | 3.87 | 3.99 | -0.05 | 0.03 |
| Qantas | 10-Oct-23 | 4.40 | BB+ | 4.58 | 4.42 | 4.51 | -0.11 | -0.03 |
| Australia Post | 13-Nov-23 | 5.50 | A+ | 3.79 | 3.67 | 3.79 | -0.03 | 0.07 |
| Westpac | 21-Nov-23 | 4.40 | AA- | 3.84 | 3.71 | 3.81 | -0.06 | -0.03 |
| Fonterra | 26-Feb-24 | 5.50 | A- | 4.13 | 3.99 | 4.12 | -0.05 | 0.00 |
| NAB | 11-Mar-24 | 5.00 | AA- | 3.93 | 3.80 | 3.93 | -0.03 | 0.07 |
| Rabobank Nederland (Aust) | 11-Apr-24 | 5.50 | A+ | 4.03 | 3.89 | 4.03 | -0.02 | 0.00 |
| CBA | 27-May-24 | 4.75 | AA- | 4.03 | 3.89 | 4.02 | -0.03 | 0.06 |
| AusNet | 21-Jun-24 | 4.00 | BBB+ | 4.58 | 4.44 | 4.56 | -0.05 | -0.06 |
| Macquarie Bank | 7-Aug-24 | 1.75 | A+ | 4.21 | 4.07 | 4.21 | -0.02 | -0.07 |
| Wells Fargo | 27-Aug-24 | 4.75 | A+ | 4.60 | 4.43 | 4.60 | 0.01 | 0.07 |
| University of Sydney | 28-Aug-25 | 3.75 | Aa1 | 4.09 | 3.93 | 4.09 | -0.05 | 0.05 |
| Apple Inc | 10-Jun-26 | 3.60 | AA+ | 4.18 | 4.01 | 4.18 | -0.04 | -0.04 |
| CBA | 11-Jun-26 | 4.20 | AA- | 4.28 | 4.11 | 4.28 | -0.04 | 0.00 |
| ANZ | 22-Jul-26 | 4.00 | AA- | 4.29 | 4.13 | 4.29 | -0.06 | -0.04 |
| Qantas | 12-Oct-26 | 4.75 | BB+ | 5.42 | 5.25 | 5.41 | -0.06 | -0.02 |
| Australia Pacific Airports | 4-Nov-26 | 3.75 | BBB+ | 4.96 | 4.80 | 4.96 | -0.02 | -0.07 |
| CBA | 17-Nov-26 | 3.25 | AA- | 4.28 | 4.13 | 4.28 | -0.05 | 0.03 |
| Australia Post | 1-Dec-26 | 4.00 | A+ | 4.24 | 4.07 | 4.24 | -0.03 | -0.02 |
| WSO Finance | 31-Mar-27 | 4.50 | A- | 4.78 | 4.62 | 4.77 | -0.06 | -0.10 |
| Telstra | 19-Apr-27 | 4.00 | A | 4.52 | 4.36 | 4.52 | -0.06 | -0.12 |
| Vicinity Centre | 26-Apr-27 | 4.00 | A | 5.03 | 4.86 | 4.99 | -0.09 | -0.05 |
| Dexus Finance | 11-May-27 | 4.25 | A3 | 4.77 | 4.60 | 4.75 | -0.07 | -0.10 |
| Asciano | 12-May-27 | 5.40 | BBB- | 5.83 | 5.67 | 5.83 | -0.08 | -0.18 |
| Fonterra | 2-Nov-27 | 4.00 | A- | 4.67 | 4.50 | 4.67 | -0.05 | -0.06 |
| Macquarie | 15-Dec-27 | 4.15 | BBB+ | 5.36 | 5.18 | 5.36 | -0.05 | -0.05 |
| AusNet | 21-Aug-28 | 4.20 | A- | 5.46 | 5.30 | 5.44 | -0.11 | -0.15 |