Summary: Corporate bond spreads up 11bps on average; swap spreads fairly stable; iTraxx down 3 points; primary market issuance contracts considerably.
Corporate spreads finished the week about 11bps wider on average as corporate yields outpaced the rises of their Commonwealth counterparts. The majority of spreads’ week-on-week changes at the individual level were within a range of -7bps to 20bps and there were no especially notable exceptions apart from some lines which matures this year.
One of the two other main measures of corporate risk, swap-to-bond spreads, remained fairly stable along the curve. The other measure, credit default swap premiums, declined modestly. The Australian credit default swap index, the iTraxx Australia Series 37, finished 3.00 points lower at 116.00 points.
Volumes in the primary market for corporate bonds and notes contracted considerably. $0.5 billion worth of bonds or notes were priced by local entities or their subsidiaries, whereas in the previous week issuance amounted to $1.7 billion. There were no asset-backed transactions.
Floating rates were popular this week.
Midweek, Ampol priced $150 million worth of June 2082 Tier 2 FRNs, callable in June 2028 at BBSW + 380bps. When Ampol issued a similar Tier 2 FRN in November 2021, it was priced at BBSW + 340bps.
Woori Bank’s Sydney branch issued a June 2025 FRN at about the same time to raise $130 million. The FRNs were priced at BBSW + 110bps. Woori had previously favoured 1-year FRNs.
NAB issued $110 million of June 2029 FRNs on Thursday at BBSW + 118bps. Commonwealth Bank issued $140 million of June 2029s the next day, also at BBSW + 118bps. The maturity dates of each are separated by one day.
The primary market for kangaroo bonds shut its door and there were no deals.
Interested readers can find more details as well as other bond transactions in our tables via the link below.
| ISSUER | MATURITY | COUPON (%) | RATING | WEEK HIGH | WEEK LOW | CLOSING YIELD | Δ WEEK | Δ MONTH |
|---|---|---|---|---|---|---|---|---|
| GE Capital | 8-Aug-22 | 5.50 | BBB+ | 1.88 | 1.81 | 1.81 | 0.03 | 0.01 |
| Optus | 23-Aug-22 | 3.25 | A | 2.05 | 1.95 | 2.04 | 0.19 | 0.46 |
| Apple Inc | 28-Aug-22 | 3.70 | AA+ | 1.88 | 1.79 | 1.85 | 0.12 | 0.40 |
| Wells Fargo | 7-Sep-22 | 5.25 | A- | 2.34 | 2.18 | 2.33 | 0.22 | 0.50 |
| Melbourne Airport | 15-Sep-22 | 4.00 | BBB+ | 2.33 | 1.94 | 2.33 | 0.56 | 0.80 |
| Telstra | 16-Sep-22 | 4.00 | A | 2.51 | 2.31 | 2.50 | 0.42 | 0.80 |
| Stockland | 23-Nov-22 | 4.50 | A- | 2.81 | 2.34 | 2.42 | 0.16 | 0.62 |
| ANZ | 16-Aug-23 | 5.00 | AA- | 4.14 | 3.89 | 4.14 | 0.67 | 1.13 |
| Transpower NZ | 28-Aug-23 | 5.75 | AA- | 4.06 | 3.82 | 4.02 | 0.62 | 1.06 |
| Mirvac Finance | 18-Sep-23 | 3.50 | BBB+ | 4.36 | 4.12 | 4.34 | 0.64 | 1.11 |
| Qantas | 10-Oct-23 | 4.40 | BB+ | 5.11 | 4.86 | 5.03 | 0.60 | 1.01 |
| Australia Post | 13-Nov-23 | 5.50 | A+ | 4.22 | 3.96 | 4.22 | 0.64 | 1.12 |
| Westpac | 21-Nov-23 | 4.40 | AA- | 4.33 | 4.10 | 4.33 | 0.66 | 1.04 |
| Fonterra | 26-Feb-24 | 5.50 | A- | 4.68 | 4.44 | 4.65 | 0.66 | 1.18 |
| NAB | 11-Mar-24 | 5.00 | AA- | 4.47 | 4.28 | 4.47 | 0.62 | 1.12 |
| Rabobank Nederland (Aust) | 11-Apr-24 | 5.50 | A+ | 4.71 | 4.49 | 4.69 | 0.65 | 1.20 |
| CBA | 27-May-24 | 4.75 | AA- | 4.58 | 4.37 | 4.57 | 0.64 | 1.06 |
| AusNet | 21-Jun-24 | 4.00 | BBB+ | 5.17 | 4.97 | 5.09 | 0.57 | 0.96 |
| Macquarie Bank | 7-Aug-24 | 1.75 | A+ | 4.96 | 4.73 | 4.95 | 0.66 | 1.07 |
| Wells Fargo | 27-Aug-24 | 4.75 | A+ | 5.18 | 4.92 | 5.17 | 0.68 | 1.13 |
| University of Sydney | 28-Aug-25 | 3.75 | Aa1 | 4.77 | 4.58 | 4.72 | 0.59 | 0.98 |
| Apple Inc | 10-Jun-26 | 3.60 | AA+ | 4.99 | 4.73 | 4.94 | 0.63 | 1.04 |
| CBA | 11-Jun-26 | 4.20 | AA- | 4.99 | 4.74 | 4.96 | 0.62 | 0.86 |
| ANZ | 22-Jul-26 | 4.00 | AA- | 5.05 | 4.80 | 5.01 | 0.63 | 0.93 |
| Qantas | 12-Oct-26 | 4.75 | BB+ | 6.23 | 5.95 | 6.16 | 0.64 | 0.97 |
| Australia Pacific Airports | 4-Nov-26 | 3.75 | BBB+ | 5.64 | 5.39 | 5.61 | 0.63 | 0.97 |
| CBA | 17-Nov-26 | 3.25 | AA- | 4.96 | 4.72 | 4.96 | 0.64 | 0.87 |
| Australia Post | 1-Dec-26 | 4.00 | A+ | 5.00 | 4.73 | 4.99 | 0.61 | 1.00 |
| WSO Finance | 31-Mar-27 | 4.50 | A- | 5.50 | 5.23 | 5.50 | 0.63 | 1.02 |
| Telstra | 19-Apr-27 | 4.00 | A | 5.33 | 5.07 | 5.31 | 0.63 | 1.02 |
| Vicinity Centre | 26-Apr-27 | 4.00 | A | 5.73 | 5.46 | 5.72 | 0.65 | 1.24 |
| Dexus Finance | 11-May-27 | 4.25 | A3 | 5.50 | 5.22 | 5.49 | 0.65 | 1.08 |
| Asciano | 12-May-27 | 5.40 | BBB- | 6.65 | 6.36 | 6.59 | 0.61 | 0.97 |
| Fonterra | 2-Nov-27 | 4.00 | A- | 5.52 | 5.24 | 5.47 | 0.62 | 1.06 |
| Macquarie | 15-Dec-27 | 4.15 | BBB+ | 6.15 | 5.86 | 6.12 | 0.64 | 0.95 |
| AusNet | 21-Aug-28 | 4.20 | A- | 6.18 | 5.90 | 6.16 | 0.64 | 1.04 |