Summary: Trading margins up on average; rises outnumber falls by 2:1; margin of LFSPA largest mover over week.
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The median trading margin of ASX-listed hybrids finished the week up slightly as the number of securities with higher spreads to BBSW outnumbered securities with lower spreads by a ratio of 2:1. At the end of the week, the median trading margin had rebounded from 2.36% to 2.44%, a reading which is still below the lower bound of its “normal” ten-year trading range.
Trading margins of the majority of hybrids varied within a range of -8bps to +24bps. Ignoring short-dated securities, the margin of Lattitude Capital Notes (LFSPA, +65bps) had the largest (absolute) change over the week.
3-month BBSW finished the week 21bps higher at 0.92%. Add the trading margin from the above chart or from the tables to this figure for an estimate of the gross return per annum in the absence of BBSW rate changes. The gross return may contain imputation credits. BBSW typically is around 15bps (average since 1990) more than the RBA rate.
ASX-LISTED HYBRIDS (NON-STANDARD)
| COMPANY | CODE | HYBRID TYPE | MATURITY/ CALL DATE | MARGIN INCL. CREDITS | TRADING MARGIN | WEEK CHANGE | WEEK CLOSE | RUNNING YIELD** |
|---|---|---|---|---|---|---|---|---|
| Challenger | CGFPA | Capital Notes | 25-May-22 | 3.40% | 3.52% | 0.01% | 99.00 | 4.34% |
| Crown | CWNHB | Sub Notes 2 | 23-Apr-75 | 4.00% | 4.28% | 0.03% | 97.50 | 5.02% |
| Nufarm | NFNG | Step Up | Perpetual | 3.90% | 5.47% | 0.07% | 88.30 | 6.34% |
| Omni Bridgeway | OBLHA | Bond | 31/01/2022 | 5.20% | 4.31% | -0.02% | 101.00 | 6.03% |
| Ramsay Health Care | RHCPA | Perpetual PS | Perpetual | 4.85% | 5.68% | 0.10% | 100.00 | 6.55% |
ASX-LISTED HYBRIDS (NON-STANDARD)
| COMPANY | CODE | HYBRID TYPE | MATURITY/ CALL DATE | MARGIN INCL. CREDITS | TRADING MARGIN | WEEK CHANGE | WEEK CLOSE | RUNNING YIELD** |
|---|---|---|---|---|---|---|---|---|
| Challenger | CGFPA | Capital Notes | 25-May-22 | 3.40% | 3.52% | 0.01% | 99.00 | 4.34% |
| Crown | CWNHB | Sub Notes 2 | 23-Apr-75 | 4.00% | 4.28% | 0.03% | 97.50 | 5.02% |
| Nufarm | NFNG | Step Up | Perpetual | 3.90% | 5.47% | 0.07% | 88.30 | 6.34% |
| Omni Bridgeway | OBLHA | Bond | 31/01/2022 | 5.20% | 4.31% | -0.02% | 101.00 | 6.03% |
| Ramsay Health Care | RHCPA | Perpetual PS | Perpetual | 4.85% | 5.68% | 0.10% | 100.00 | 6.55% |
** “Clean” running yield. Includes franking credits if present.