Corporate

Summary: Corporate bond spreads 3bps wider on average; swap spreads wider except at long end; iTraxx down 12.50 points; local issuance falls back, still at elevated level; two RMBS transactions; three primary-market kangaroo deals.

Corporate yields again generally outpaced the rises of their Commonwealth Government counterparts, resulting in a 3bps increase in the median spread by the end of the week. The majority of spreads’ week-on-week changes at the individual level were within a range of -3bps to +8bps. There was one notable exception; the yield of Commonwealth Bank October 2026s (spread: 97bps, +13bps) outpaced its benchmark by more than most.

One of the two other main measures of corporate risk, swap-to-bond spreads, widened at the short end and the belly but tightened at the long end. The other measure, credit default swap premiums, fell substantially on average. The Australian credit default swap index, the iTraxx Australia Series 36, finished 12.50 points lower at 81.50 points.

Volumes in the primary market for corporate bonds and notes fell back, albeit to a still-elevated level. $7.0 billion worth of bonds or notes were priced by local entities or their subsidiaries, whereas in the previous week issuance amounted to $10.0 billion. Asset-backed transactions accounted for $2.6 billion of the $7.0 billion.

Tuesday was a busy day.

Toyota Finance Australia raised $150 million through an issue of March 2025s at Swap + 80bps, 37bps more than a similar 3-year deal in September 2021.

At about the same time, the University of Tasmania raised $350 million via a $280 million tranche of March 2032s and a $70 million tranche of March 2042s.

However, the really big transactions of the week came from Macquarie Group companies that evening in the US.

Macquarie Group raised USD$1.25 billion (AUD$1.75 billion) over two tranches. USD$600 million worth of June 2028s were priced at Treasury + 200bps and USD$650 million worth of June 2033s were priced at Treasury + 230bps.

Macquarie Bank raised USD$1.5 billion (AUD$2.1 billion) over two tranches of March 2025s. USD$500 million worth of FRNs were priced at SOFR + 131bps and USD$1 billion worth of fixed-rate bonds were priced at Treasury + 120bps.

The next day, Centuria Capital (No. 2 Fund) raised $70 million at Swap + 335bps with an issue of March 2025s.

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There were two primary market transactions for asset-backed securities during the week.

Macquarie was not just raising funds in the vanilla bond market. On Thursday, it issued $2.174 billion worth of securities from its Puma 2022-1 trust, with the $2 billion Class A tranche priced at 1m BBSW + 104bps.

At about the same time, the Bank of Queensland raised $440 million for its REDS MHP 2022-1 Trust over seven tranches. The securities are backed by vehicle, equipment, fixtures and fittings loans to medical and health professionals and the $409.2 million Class A tranche was priced at 1m BBSW + 100bps.

There were three deals in the primary market for kangaroo bonds.

The Nordic Investment Bank issued $300 million of September 2025s at ACGB + 59bps on Tuesday.

The next day, Svenska Handelsbanken raised $500 million over two tranches. The $400 million tranche of March 2025s were priced at Swap + 85bps and the $100 million tranche of March 2027 FRNs were priced at BBSW + 110bps.

At about the same time, the European Investment Bank raised $200 million via an issue of March 2032s at ACGB + 52bps.

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
NAB	24-Mar-22	3.25	AA-	0.29	0.25	0.27	0.02	0.12
CBA	30-Mar-22	3.25	AA-	0.27	0.26	0.26	0.00	0.12
Optus	17-Jun-22	4.00	A	0.65	0.62	0.62	-0.05	0.14
GE Capital	8-Aug-22	5.50	BBB+	0.74	0.73	0.74	0.02	0.22
Optus	23-Aug-22	3.25	A	0.81	0.72	0.76	-0.04	0.13
Apple Inc	28-Aug-22	3.70	AA+	0.60	0.57	0.60	0.05	0.17
Wells Fargo	7-Sep-22	5.25	A-	1.05	0.88	1.05	0.17	0.45
Melbourne Airport	15-Sep-22	4.00	BBB+	0.83	0.76	0.83	0.05	0.23
Telstra	16-Sep-22	4.00	A	0.81	0.77	0.81	0.02	0.24
Stockland	23-Nov-22	4.50	A-	0.96	0.86	0.96	0.05	0.35
ANZ	16-Aug-23	5.00	AA-	1.65	1.56	1.65	0.15	0.35
Transpower NZ	28-Aug-23	5.75	AA-	1.61	1.51	1.61	0.12	0.35
Mirvac Finance	18-Sep-23	3.50	BBB+	1.91	1.82	1.91	0.12	0.35
Qantas	10-Oct-23	4.40	BB+	2.74	2.63	2.74	0.12	0.42
Australia Post	13-Nov-23	5.50	A+	1.82	1.71	1.82	0.11	0.26
Westpac	21-Nov-23	4.40	AA-	1.89	1.81	1.89	0.13	0.38
Fonterra	26-Feb-24	5.50	A-	2.16	2.05	2.16	0.14	0.42
NAB	11-Mar-24	5.00	AA-	2.17	2.06	2.17	0.17	0.44
Rabobank Nederland (Aust)	11-Apr-24	5.50	A+	2.26	2.18	2.26	0.15	0.36
CBA	27-May-24	4.75	AA-	2.24	2.08	2.24	0.18	0.36
AusNet	21-Jun-24	4.00	BBB+	2.86	2.71	2.86	0.21	0.57
Macquarie Bank	7-Aug-24	1.75	A+	2.67	2.52	2.67	0.20	0.45
Wells Fargo	27-Aug-24	4.75	A+	2.83	2.69	2.83	0.20	0.56
University of Sydney	28-Aug-25	3.75	Aa1	2.85	2.73	2.85	0.13	0.39
Apple Inc	10-Jun-26	3.60	AA+	2.90	2.81	2.90	0.15	0.41
CBA	11-Jun-26	4.20	AA-	3.10	2.91	3.10	0.26	0.52
ANZ	22-Jul-26	4.00	AA-	3.11	2.94	3.11	0.24	0.53
Qantas	12-Oct-26	4.75	BB+	4.18	4.11	4.18	0.14	0.57
Australia Pacific Airports	4-Nov-26	3.75	BBB+	3.62	3.53	3.62	0.13	0.51
CBA	17-Nov-26	3.25	AA-	2.93	2.82	2.93	0.24	0.47
Australia Post	1-Dec-26	4.00	A+	3.01	2.91	3.01	0.15	0.36
WSO Finance	31-Mar-27	4.50	A-	3.49	3.40	3.49	0.19	0.53
Telstra	19-Apr-27	4.00	A	3.32	3.22	3.32	0.17	0.49
Asciano	12-May-27	5.40	BBB-	4.58	4.51	4.58	0.12	0.58
Fonterra	2-Nov-27	4.00	A-	3.47	3.37	3.47	0.15	0.55
Macquarie	15-Dec-27	4.15	BBB+	3.94	3.81	3.94	0.18	0.49
AusNet	21-Aug-28	4.20	A-	3.85	3.71	3.85	0.19	0.58