Summary: Corporate bond spreads 3bps wider on average; swap spreads wider; iTraxx up 7 points; issuance jumps on back of jumbo-sized USD issue; no primary-market kangaroo deals, no RMBS transactions.
Corporate yields generally outpaced the rises of their Commonwealth counterparts over the week. The majority of spreads’ week-on-week changes at the individual level were within a range of -3bps to +9bps. The most notable exception was Commonwealth Bank’s November 2026s (spread: 89bps, +16bps).
One of the two other main measures of corporate risk, swap-to-bond spreads, widened along the curve, especially at the short end. The other measure, credit default swap premiums, increased. The Australian credit default swap index, the iTraxx Australia Series 36, finished 7.00 points higher at 91.50 points.
Volumes in the primary market for corporate bonds and notes jumped on the back of a jumbo-sized US-dollar issue. $6 billion worth of bonds or notes were priced by local entities or their subsidiaries, whereas in the previous week issuance amounted to just $30 million. There were no asset-backed transactions.
CSL raised USD$4 billion (AUD$5.37 billion) on Wednesday night to finance its latest acquisition and for “other general purposes.” The deal comprised six fixed-rate tranches with tenors ranging from 5 years to 40 years. The shortest-dated USD$500 million tranche of April 2027s was priced at Treasury + 100bps while the longest-dated USD$500 million tranche of April 2062s was priced at Treasury + 205bps.
Bank of Queensland raised $650 million the next day via two tranches of October 2025s. The $500 million FRN tranche was priced at BBSW + 110bps while the $150 million fixed-rate tranche was priced at Swap + 110bps. Three months ago, Bank of Queensland priced some 4-year FRNs at BBSW + 85bps.
There were no transactions in the primary markets for kangaroo bonds nor asset-backed securities.
In ratings news, S&P revised the outlook for Worley Ltd from negative to stable. S&P expects Worley’s earnings to recover over the next few years.
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 | 0.82 | 0.73 | 0.79 | -0.03 | 0.17 |
| GE Capital | 8-Aug-22 | 5.50 | BBB+ | 1.15 | 0.95 | 1.15 | 0.20 | 0.41 |
| Optus | 23-Aug-22 | 3.25 | A | 1.20 | 1.02 | 1.20 | 0.15 | 0.44 |
| Apple Inc | 28-Aug-22 | 3.70 | AA+ | 0.98 | 0.79 | 0.98 | 0.18 | 0.38 |
| Wells Fargo | 7-Sep-22 | 5.25 | A- | 1.45 | 1.24 | 1.45 | 0.22 | 0.40 |
| Melbourne Airport | 15-Sep-22 | 4.00 | BBB+ | 1.16 | 0.99 | 1.16 | 0.18 | 0.32 |
| Telstra | 16-Sep-22 | 4.00 | A | 1.25 | 1.07 | 1.25 | 0.16 | 0.44 |
| Stockland | 23-Nov-22 | 4.50 | A- | 1.46 | 1.30 | 1.46 | 0.16 | 0.50 |
| ANZ | 16-Aug-23 | 5.00 | AA- | 2.58 | 2.20 | 2.58 | 0.41 | 0.93 |
| Transpower NZ | 28-Aug-23 | 5.75 | AA- | 2.61 | 2.27 | 2.61 | 0.34 | 1.00 |
| Mirvac Finance | 18-Sep-23 | 3.50 | BBB+ | 2.81 | 2.51 | 2.81 | 0.30 | 0.90 |
| Qantas | 10-Oct-23 | 4.40 | BB+ | 3.64 | 3.42 | 3.64 | 0.27 | 0.90 |
| Australia Post | 13-Nov-23 | 5.50 | A+ | 2.76 | 2.39 | 2.76 | 0.41 | 0.94 |
| Westpac | 21-Nov-23 | 4.40 | AA- | 2.86 | 2.46 | 2.86 | 0.44 | 0.97 |
| Fonterra | 26-Feb-24 | 5.50 | A- | 3.14 | 2.82 | 3.14 | 0.36 | 0.98 |
| NAB | 11-Mar-24 | 5.00 | AA- | 3.06 | 2.69 | 3.06 | 0.41 | 0.89 |
| Rabobank Nederland (Aust) | 11-Apr-24 | 5.50 | A+ | 3.21 | 2.85 | 3.21 | 0.41 | 0.95 |
| CBA | 27-May-24 | 4.75 | AA- | 3.13 | 2.79 | 3.13 | 0.41 | 0.90 |
| AusNet | 21-Jun-24 | 4.00 | BBB+ | 3.80 | 3.51 | 3.80 | 0.33 | 0.93 |
| Macquarie Bank | 7-Aug-24 | 1.75 | A+ | 3.53 | 3.19 | 3.53 | 0.42 | 0.86 |
| Wells Fargo | 27-Aug-24 | 4.75 | A+ | 3.79 | 3.38 | 3.79 | 0.45 | 0.97 |
| University of Sydney | 28-Aug-25 | 3.75 | Aa1 | 3.62 | 3.34 | 3.62 | 0.40 | 0.78 |
| Apple Inc | 10-Jun-26 | 3.60 | AA+ | 3.66 | 3.33 | 3.66 | 0.38 | 0.76 |
| CBA | 11-Jun-26 | 4.20 | AA- | 3.79 | 3.48 | 3.79 | 0.36 | 0.69 |
| ANZ | 22-Jul-26 | 4.00 | AA- | 3.80 | 3.52 | 3.80 | 0.34 | 0.69 |
| Qantas | 12-Oct-26 | 4.75 | BB+ | 5.01 | 4.74 | 5.01 | 0.32 | 0.82 |
| Australia Pacific Airports | 4-Nov-26 | 3.75 | BBB+ | 4.45 | 4.16 | 4.45 | 0.36 | 0.83 |
| CBA | 17-Nov-26 | 3.25 | AA- | 3.80 | 3.35 | 3.80 | 0.45 | 0.87 |
| Australia Post | 1-Dec-26 | 4.00 | A+ | 3.79 | 3.46 | 3.79 | 0.38 | 0.78 |
| WSO Finance | 31-Mar-27 | 4.50 | A- | 4.25 | 3.97 | 4.25 | 0.33 | 0.76 |
| Telstra | 19-Apr-27 | 4.00 | A | 4.08 | 3.84 | 4.08 | 0.29 | 0.75 |
| Vicinity Centre | 26-Apr-27 | 4.00 | A | 4.31 | 4.07 | 4.31 | 0.24 | n/a |
| Dexus Finance | 11-May-27 | 4.25 | A3 | 4.23 | 3.89 | 4.23 | 0.34 | n/a |
| Asciano | 12-May-27 | 5.40 | BBB- | 5.36 | 5.08 | 5.36 | 0.34 | 0.78 |
| Fonterra | 2-Nov-27 | 4.00 | A- | 4.26 | 4.02 | 4.26 | 0.29 | 0.79 |
| Macquarie | 15-Dec-27 | 4.15 | BBB+ | 4.89 | 4.60 | 4.89 | 0.35 | 0.95 |
| AusNet | 21-Aug-28 | 4.20 | A- | 4.81 | 4.57 | 4.81 | 0.30 | 0.97 |