Summary: Trading margins again markedly higher on average; all margins rise; margins of LFSPA, CBAPH, WBCPI largest movers over week, other margins also rise considerably; NAB announces issue margin.
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The median trading margin of ASX-listed hybrids finished the week markedly higher again as all the securities in the sample finished with higher spreads to BBSW. By the end of the week, the median trading margin had increased from 2.94% to 3.45%.
Trading margins of the majority of hybrids varied within a range of +26bps to +74bps. Ignoring short-dated securities, the margins of Latitude Capital Notes (LFSPA, +107bps), Commonwealth Bank PERLS 11 Capital Notes (CBAPH, +107bps) and Westpac Capital Notes 6 (WBCPI, +99bps) had the largest (absolute) changes over the week. Quite a few of the other hybrids’ margins also rose considerably.
NAB announced the issue margin for its latest offer of capital notes on Wednesday. As expected, the issue margin was at the low end of the indicative range (3.15%).
Suncorp will redeem its Capital Notes (code: SUNPF) on the Optional Exchange Date of 17 June 2022. Holders will receive the face value of $100.00 plus the final distribution of $0.7516 per note.
3-month BBSW finished the week 27bps higher at 1.51%. 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 (STANDARD)
| COMPANY | CODE | HYBRID TYPE | MATURITY/ CALL DATE | MARGIN INCL. CREDITS | TRADING MARGIN | WEEK CHANGE | WEEK CLOSE | RUNNING YIELD** |
|---|---|---|---|---|---|---|---|---|
| Nat. Aust. Bank | NABPD | Capital Notes 2 | 7-Jul-22 | 4.95% | 11.35% | 6.76% | 100.47 | 6.49% |
| Westpac | WBCPE | Capital Notes 2 | 23-Sep-22 | 3.05% | 3.04% | 1.12% | 100.72 | 4.56% |
| CBA | CBAPD | PERLS 7 | 15-Dec-22 | 2.80% | 2.96% | 0.61% | 99.90 | 4.31% |
| ANZ | ANZPF | Capital Notes 3 | 24-Mar-23 | 3.60% | 3.62% | 1.16% | 101.38 | 5.91% |
| Challenger | CGFPB | Capital Notes 2 | 22-May-23 | 4.40% | 3.84% | 0.51% | 100.80 | 5.87% |
| Insurance Australia | IAGPD | Capital Notes | 15-Jun-23 | 4.70% | 3.53% | 0.55% | 101.15 | 6.13% |
| ANZ | ANZPG | Capital Notes 4 | 20-Mar-24 | 4.70% | 3.15% | 0.49% | 102.55 | 6.04% |
| CBA | CBAPH | PERLS 11 | 26-Apr-24 | 3.70% | 3.25% | 1.07% | 100.84 | 5.16% |
| Bendigo Bank | BENPG | CPS 4 | 13-Jun-24 | 3.75% | 3.53% | 0.22% | 100.48 | 5.23% |
| Suncorp | SUNPG | Capital Notes 2 | 17-Jun-24 | 3.65% | 3.49% | 0.40% | 100.34 | 5.13% |
| Westpac | WBCPI | Capital Notes 6 | 30-Jul-24 | 3.70% | 3.12% | 0.99% | 101.15 | 5.14% |
| Bank of Qld | BOQPE | Capital Notes | 15-Aug-24 | 3.75% | 3.64% | 0.61% | 100.60 | 5.24% |
| Macquarie Group | MQGPC | Capital Notes 3 | 16-Dec-24 | 4.00% | 3.58% | 0.77% | 101.05 | 5.45% |
| ANZ | ANZPH | Capital Notes 5 | 20-Mar-25 | 3.80% | 2.93% | 0.51% | 102.21 | 5.19% |
| CBA | CBAPG | PERLS 10 | 15-Apr-25 | 3.40% | 3.24% | 0.49% | 100.50 | 4.88% |
| Westpac | WBCPH | Capital Notes 5 | 22-Sep-25 | 3.20% | 3.27% | 0.65% | 99.85 | 4.71% |
| AMP Group | AMPPB | Capital Notes 2 | 16-Dec-25 | 4.50% | 5.19% | 0.51% | 98.20 | 6.11% |
| Macquarie Bank | MBLPC | Capital Notes 2 | 22-Dec-25 | 4.70% | 3.32% | 0.20% | 104.27 | 5.94% |
| Challenger | CGFPC | Capital Notes 3 | 25-May-26 | 4.60% | 4.07% | 0.04% | 102.20 | 5.99% |
| Nat. Aust. Bank | NABPF | Capital Notes 3 | 17-Jun-26 | 4.00% | 3.16% | 0.58% | 102.99 | 5.34% |
| Suncorp | SUNPH | Capital Notes 3 | 17-Jun-26 | 3.00% | 3.48% | 0.61% | 98.50 | 4.57% |
| Macquarie Group | MQGPD | Capital Notes 4 | 10-Sep-26 | 4.15% | 3.54% | 0.35% | 102.39 | 5.52% |
| CBA | CBAPJ | PERLS 13 | 20-Oct-26 | 2.75% | 3.35% | 0.41% | 97.96 | 4.34% |
| Latitude | LFSPA | Capital Notes | 27-Oct-26 | 4.75% | 5.82% | 1.07% | 97.40 | 6.47% |
| Westpac | WBCPJ | Capital Notes 7 | 22-Mar-27 | 3.40% | 3.44% | 0.50% | 99.95 | 4.90% |
| CBA | CBAPI | PERLS 12 | 20-Apr-27 | 3.00% | 3.37% | 0.51% | 98.70 | 4.56% |
| Bank of Qld | BOQPF | Capital Notes 2 | 14-May-27 | 3.80% | 3.64% | 0.32% | 101.16 | 5.26% |
| Bendigo Bank | BENPH | Capital Notes | 15-Jun-27 | 3.80% | 3.88% | 0.36% | 99.90 | 5.31% |
| Macquarie Group | MQGPE | Capital Notes 5 | 20-Sep-27 | 2.90% | 3.60% | 0.69% | 97.20 | 4.53% |
| Nat. Aust. Bank | NABPH | Capital Notes 5 | 17-Dec-27 | 3.50% | 3.57% | 0.59% | 99.90 | 5.01% |
| ANZ | ANZPI | Capital Notes 6 | 20-Mar-28 | 3.00% | 3.46% | 0.47% | 98.06 | 4.59% |
| Suncorp | SUNPI | Capital Notes 4 | 17-Jun-28 | 2.90% | 3.29% | 0.39% | 98.34 | 4.48% |
| Macquarie Bank | MBLPD | Capital Notes 3 | 7-Dec-28 | 2.90% | 3.19% | 0.28% | 98.80 | 4.46% |
| ANZ | ANZPJ | Capital Notes 7 | 20-Mar-29 | 2.70% | 3.21% | 0.23% | 97.50 | 4.31% |
| CBA | CBAPK | PERLS 14 | 15-Jun-29 | 2.75% | 3.28% | 0.37% | 97.40 | 4.37% |
| Westpac | WBCPK | Capital Notes 8 | 21-Sep-29 | 2.90% | 3.30% | 0.29% | 98.00 | 4.49% |
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% | 3.54% | 0.02% | 98.50 | 4.99% |
| Crown | CWNHB | Sub Notes 2 | 23-Apr-75 | 4.00% | 4.23% | -0.12% | 99.00 | 5.62% |
| Nufarm | NFNG | Step Up | Perpetual | 3.90% | 5.88% | 0.12% | 85.10 | 7.39% |
| Omni Bridgeway | OBLHA | Bond | 31/01/2022 | 5.20% | 5.81% | 0.36% | 100.68 | 6.72% |
| Ramsay Health Care | RHCPA | Perpetual PS | Perpetual | 4.85% | 5.68% | 0.02% | 100.74 | 7.19% |
** “Clean” running yield. Includes franking credits if present.