Australian retail investors have, in recent times, had limited choice investing in ASX-listed senior company bonds. This has been partly due to a regulatory regime which demanded a full prospectus be issued: a prospectus which was both costly to produce and onerous in terms of liabilities to company directors.
Relatively new legislation allowing the issue of ‘simple’ corporate bonds has seen Australian Unity become the first issuer of bonds under the new documentation regime. A previous YieldReport article discussed the issue announcement.
The issue has now been closed with $250 million of senior BBB+ (investment grade rating by Australia Ratings) bonds issued to a mix of institutional, private wealth and retail clients. The bonds will be quoted and begin trading on the ASX on Wednesday 16 December. The yield was set at 90 day bank bill swap rate plus 280bps or around 5.15% p.a. for the first 90 days.
The inaugural simple bond issue was arranged and led by Evans & Partners and its head of fixed income, Michael Saba, was delighted with the success of the issue. He told YieldReport the issue “filled a void” in the listed investor universe and the new issue not only provided diversity of credit but the seniority of the debt in the corporate debt structure provided good security for clients.