Summary: Corporate bond spreads unchanged on average; swap spreads widen noticeably; iTraxx up 14 points; primary market issuance subsides considerably.
Corporate spreads finished the week unchanged on average as corporate yields generally kept pace with the rises of their Commonwealth counterparts. The majority of spreads’ week-on-week changes at the individual level were within a range of -4bps to 9bps; the most obvious exceptions came from Commonwealth’s June 2026s (spread: 106bps, -11bps) and Macquarie’s December 2027s (spread: 208bps, +19bps).
One of the two other main measures of corporate risk, swap-to-bond spreads, again widened noticeably along the curve. The other measure, credit default swap premiums, increased significantly. The Australian credit default swap index, the iTraxx Australia Series 37, finished 14.00 points higher at 119.00 points.
Volumes in the primary market for corporate bonds and notes subsided considerably in the absence of any major bank deals. $1.7 billion worth of bonds or notes were priced by local entities or their subsidiaries, whereas in the previous week issuance amounted to $8.1 billion. Asset-backed transactions accounted for $1.2 billion of $1.7 billion.
Auswide Bank issued a new line of June 2025 FRNs at BBSW + 130bps to raise $20 million on Monday. This is 40bps wider than Auswide’s previous issue of 3-year FRNs in mid-March.
A couple of days later, DBS Bank Australia also went down the 3-year FRN path. $500 million was raised at BBSW + 85bps. DBS previously issued 3-year FRNs back in September 2019.
The primary market for kangaroo bonds remained quiet and there was just the one deal. The Asian Development Bank issued a new line of June 2025 bonds at ACGB + 66bps to raise $700 million. When the ADB previously issued 3-year bonds in February, its spread to ACGBs was 53bps.
There were a trio of modest RMBS and ABS deals done during the week.
Plenti Finance raised $437 million over eight tranches for its Auto ABS 2022-1 Trust on Wednesday, with the $360 million Class A tranche priced at 1m BBSW + 140bps.
Brighten raised a total of $524 million over eight tranches for its Solaris 2022-1 trust on Friday. The $115 million Class A-S tranche was priced at 1m BBSW + 105bps.
At about the same time, relative-newcomer Wisr raised $250 million for its Freedom 2022-1 trust over nine tranches. The $132.5 million Class A1 tranche was priced at 1m BBSW + 140bps.
In ratings news, Moody’s revised its outlook for Woodside Petroleum’s Baa1 rating from “negative” to “stable” following the completion of BHP Petroleum merger.
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 |
|---|---|---|---|---|---|---|---|---|
| Optus | 17-Jun-22 | 4.00 | A | 1.29 | 1.14 | 1.29 | 0.29 | 0.41 |
| GE Capital | 8-Aug-22 | 5.50 | BBB+ | 1.78 | 1.68 | 1.78 | 0.10 | 0.03 |
| Optus | 23-Aug-22 | 3.25 | A | 1.84 | 1.71 | 1.84 | 0.16 | 0.30 |
| Apple Inc | 28-Aug-22 | 3.70 | AA+ | 1.73 | 1.55 | 1.73 | 0.20 | 0.29 |
| Wells Fargo | 7-Sep-22 | 5.25 | A- | 2.11 | 1.91 | 2.11 | 0.18 | 0.25 |
| Melbourne Airport | 15-Sep-22 | 4.00 | BBB+ | 1.79 | 1.61 | 1.77 | 0.21 | 0.27 |
| Telstra | 16-Sep-22 | 4.00 | A | 2.07 | 1.90 | 2.07 | 0.19 | 0.40 |
| Stockland | 23-Nov-22 | 4.50 | A- | 2.30 | 2.05 | 2.26 | 0.26 | 0.43 |
| ANZ | 16-Aug-23 | 5.00 | AA- | 3.51 | 3.23 | 3.48 | 0.25 | 0.31 |
| Transpower NZ | 28-Aug-23 | 5.75 | AA- | 3.48 | 3.21 | 3.40 | 0.22 | 0.36 |
| Mirvac Finance | 18-Sep-23 | 3.50 | BBB+ | 3.75 | 3.47 | 3.70 | 0.25 | 0.40 |
| Qantas | 10-Oct-23 | 4.40 | BB+ | 4.49 | 4.25 | 4.43 | 0.18 | 0.29 |
| Australia Post | 13-Nov-23 | 5.50 | A+ | 3.61 | 3.32 | 3.57 | 0.26 | 0.32 |
| Westpac | 21-Nov-23 | 4.40 | AA- | 3.72 | 3.43 | 3.66 | 0.22 | 0.21 |
| Fonterra | 26-Feb-24 | 5.50 | A- | 4.05 | 3.77 | 3.99 | 0.23 | 0.37 |
| NAB | 11-Mar-24 | 5.00 | AA- | 3.89 | 3.64 | 3.85 | 0.21 | 0.36 |
| Rabobank Nederland (Aust) | 11-Apr-24 | 5.50 | A+ | 4.05 | 3.73 | 4.04 | 0.30 | 0.41 |
| CBA | 27-May-24 | 4.75 | AA- | 4.02 | 3.75 | 3.93 | 0.18 | 0.25 |
| AusNet | 21-Jun-24 | 4.00 | BBB+ | 4.53 | 4.24 | 4.52 | 0.22 | 0.23 |
| Macquarie Bank | 7-Aug-24 | 1.75 | A+ | 4.39 | 4.09 | 4.29 | 0.18 | 0.20 |
| Wells Fargo | 27-Aug-24 | 4.75 | A+ | 4.56 | 4.29 | 4.49 | 0.24 | 0.29 |
| University of Sydney | 28-Aug-25 | 3.75 | Aa1 | 4.19 | 3.98 | 4.13 | 0.17 | 0.17 |
| Apple Inc | 10-Jun-26 | 3.60 | AA+ | 4.32 | 4.15 | 4.31 | 0.18 | 0.27 |
| CBA | 11-Jun-26 | 4.20 | AA- | 4.42 | 4.26 | 4.34 | 0.06 | 0.07 |
| ANZ | 22-Jul-26 | 4.00 | AA- | 4.44 | 4.29 | 4.38 | 0.08 | 0.16 |
| Qantas | 12-Oct-26 | 4.75 | BB+ | 5.60 | 5.41 | 5.53 | 0.13 | 0.20 |
| Australia Pacific Airports | 4-Nov-26 | 3.75 | BBB+ | 5.03 | 4.84 | 4.99 | 0.17 | 0.19 |
| CBA | 17-Nov-26 | 3.25 | AA- | 4.37 | 4.23 | 4.33 | 0.12 | 0.16 |
| Australia Post | 1-Dec-26 | 4.00 | A+ | 4.41 | 4.21 | 4.38 | 0.17 | 0.27 |
| WSO Finance | 31-Mar-27 | 4.50 | A- | 4.90 | 4.72 | 4.87 | 0.16 | 0.27 |
| Telstra | 19-Apr-27 | 4.00 | A | 4.73 | 4.55 | 4.68 | 0.17 | 0.28 |
| Vicinity Centre | 26-Apr-27 | 4.00 | A | 5.10 | 4.92 | 5.08 | 0.21 | 0.46 |
| Dexus Finance | 11-May-27 | 4.25 | A3 | 4.90 | 4.66 | 4.84 | 0.20 | 0.28 |
| Asciano | 12-May-27 | 5.40 | BBB- | 6.04 | 5.89 | 5.98 | 0.12 | 0.27 |
| Fonterra | 2-Nov-27 | 4.00 | A- | 4.86 | 4.69 | 4.85 | 0.18 | 0.31 |
| Macquarie | 15-Dec-27 | 4.15 | BBB+ | 5.51 | 5.35 | 5.49 | 0.36 | 0.17 |
| AusNet | 21-Aug-28 | 4.20 | A- | 5.52 | 5.32 | 5.52 | 0.23 | 0.39 |