Summary: Corporate bond spreads 4bps wider on average; swap spreads tighter; iTraxx up 6.5 points; issuance volumes increase on back of major-bank deal; no primary-market kangaroo deals; one RMBS transaction.
Corporate spreads finished the week about 4bps wider on average as corporate yields generally outpaced the rises of their Commonwealth counterparts. The majority of spreads’ week-on-week changes at the individual level were within a range of -2bps to +9bps. The most notable exception was Westpac’s November 2023s (spread: 71bps, +17bps).
One of the two other main measures of corporate risk, swap-to-bond spreads, tightened along the curve. However, the other measure, credit default swap premiums, increased again. The Australian credit default swap index, the iTraxx Australia Series 37, finished 6.50 points higher at 105.00 points.
Volumes in the primary market for corporate bonds and notes increased on the back of a large major bank deal. $5.2 billion worth of bonds or notes were priced by local entities or their subsidiaries, whereas in the previous week issuance amounted to $4.0 billion. Asset-backed transactions accounted for $1.1 billion of $5.2 billion.
Late in the week, ANZ raised a total of $4 billion over three tranches. The May 2025 tranches comprised $1 billion of fixed-rate bonds and $2 billion of floating-rate tranches and were priced at Swap/BBSW + 77bps. The $1 billion May 2027 tranche was priced at Swap + 97bps.
At about the same time, Bank of Queensland tapped its October 2025 FRNs for $40 million at 3m BBSW + 110bps.
At the end of the week, Heartland Australia Group raised $115 million through an issue of May 2025 FRNs at BBSW + 275bps.
There were no deals done in the primary market for kangaroo bonds. Swapping out of Aussie dollars and into the issuer’s home currency may have become less attractive given recent currency and interest rate movements.
There was one RMBS deal done during the week. Firstmac raised $1.1 billion for its Trust No. 4 2022-3 on Thursday, with the $935 million Class A-1 tranche priced at 1m BBSW + 120bps.
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 | 0.96 | 0.88 | 0.88 | 0.06 | 0.24 |
| GE Capital | 8-Aug-22 | 5.50 | BBB+ | 1.75 | 1.36 | 1.75 | 0.38 | 0.90 |
| Optus | 23-Aug-22 | 3.25 | A | 1.57 | 1.38 | 1.54 | 0.26 | 0.71 |
| Apple Inc | 28-Aug-22 | 3.70 | AA+ | 1.48 | 1.22 | 1.44 | 0.26 | 0.77 |
| Wells Fargo | 7-Sep-22 | 5.25 | A- | 1.87 | 1.61 | 1.87 | 0.26 | 0.79 |
| Melbourne Airport | 15-Sep-22 | 4.00 | BBB+ | 1.58 | 1.37 | 1.51 | 0.23 | 0.62 |
| Telstra | 16-Sep-22 | 4.00 | A | 1.73 | 1.48 | 1.68 | 0.29 | 0.74 |
| Stockland | 23-Nov-22 | 4.50 | A- | 2.01 | 1.71 | 1.83 | 0.25 | 0.84 |
| ANZ | 16-Aug-23 | 5.00 | AA- | 3.25 | 2.82 | 3.16 | 0.41 | 1.16 |
| Transpower NZ | 28-Aug-23 | 5.75 | AA- | 3.18 | 2.88 | 3.04 | 0.29 | 1.05 |
| Mirvac Finance | 18-Sep-23 | 3.50 | BBB+ | 3.48 | 3.12 | 3.30 | 0.30 | 0.99 |
| Qantas | 10-Oct-23 | 4.40 | BB+ | 4.27 | 3.89 | 4.14 | 0.36 | 1.03 |
| Australia Post | 13-Nov-23 | 5.50 | A+ | 3.37 | 2.98 | 3.26 | 0.37 | 1.06 |
| Westpac | 21-Nov-23 | 4.40 | AA- | 3.46 | 3.06 | 3.45 | 0.46 | 1.18 |
| Fonterra | 26-Feb-24 | 5.50 | A- | 3.74 | 3.37 | 3.62 | 0.35 | 1.04 |
| NAB | 11-Mar-24 | 5.00 | AA- | 3.58 | 3.20 | 3.48 | 0.37 | 0.92 |
| Rabobank Nederland (Aust) | 11-Apr-24 | 5.50 | A+ | 3.75 | 3.40 | 3.63 | 0.33 | 0.96 |
| CBA | 27-May-24 | 4.75 | AA- | 3.77 | 3.41 | 3.68 | 0.37 | 1.05 |
| AusNet | 21-Jun-24 | 4.00 | BBB+ | 4.39 | 4.04 | 4.29 | 0.41 | 1.03 |
| Macquarie Bank | 7-Aug-24 | 1.75 | A+ | 4.19 | 3.75 | 4.09 | 0.43 | 1.08 |
| Wells Fargo | 27-Aug-24 | 4.75 | A+ | 4.30 | 3.94 | 4.20 | 0.35 | 0.94 |
| University of Sydney | 28-Aug-25 | 3.75 | Aa1 | 4.08 | 3.75 | 3.96 | 0.32 | 0.65 |
| Apple Inc | 10-Jun-26 | 3.60 | AA+ | 4.19 | 3.82 | 4.03 | 0.33 | 0.77 |
| CBA | 11-Jun-26 | 4.20 | AA- | 4.34 | 3.97 | 4.26 | 0.41 | 0.77 |
| ANZ | 22-Jul-26 | 4.00 | AA- | 4.33 | 3.96 | 4.22 | 0.37 | 0.71 |
| Qantas | 12-Oct-26 | 4.75 | BB+ | 5.50 | 5.17 | 5.33 | 0.28 | 0.70 |
| Australia Pacific Airports | 4-Nov-26 | 3.75 | BBB+ | 4.97 | 4.65 | 4.80 | 0.30 | 0.75 |
| CBA | 17-Nov-26 | 3.25 | AA- | 4.30 | 3.96 | 4.17 | 0.34 | 0.81 |
| Australia Post | 1-Dec-26 | 4.00 | A+ | 4.27 | 3.95 | 4.11 | 0.28 | 0.67 |
| WSO Finance | 31-Mar-27 | 4.50 | A- | 4.73 | 4.43 | 4.60 | 0.31 | 0.71 |
| Telstra | 19-Apr-27 | 4.00 | A | 4.54 | 4.22 | 4.40 | 0.30 | 0.67 |
| Vicinity Centre | 26-Apr-27 | 4.00 | A | 4.76 | 4.49 | 4.62 | 0.26 | 0.63 |
| Dexus Finance | 11-May-27 | 4.25 | A3 | 4.68 | 4.39 | 4.56 | 0.30 | 0.75 |
| Asciano | 12-May-27 | 5.40 | BBB- | 5.89 | 5.55 | 5.72 | 0.31 | 0.73 |
| Fonterra | 2-Nov-27 | 4.00 | A- | 4.70 | 4.40 | 4.54 | 0.26 | 0.70 |
| Macquarie | 15-Dec-27 | 4.15 | BBB+ | 5.47 | 5.04 | 5.31 | 0.37 | 0.92 |
| AusNet | 21-Aug-28 | 4.20 | A- | 5.28 | 4.98 | 5.13 | 0.28 | 0.77 |