A new report by BondAdviser, published through stockbrokers E.L & C Baillieu, has produced its latest list of preferred capital notes and bonds which trade on the ASX.
Commonwealth Bank PERLS 8 (ASX code: CBAPE) is its preferred credit security, stating it represents the “best value” of CBA’s several listed hybrid securities.
The report was put together last week, with the price of PERLS 8 finishing at $103.28 on Friday 15 January. By the close of close of business on 20 January, the price had slipped to $102.95, providing a 3.65% fully franked running yield and a trading margin of 1.92% over 3 month BBSW.
(As at 15/01/2021)
Other listed hybrids favoured by BondAviser/Baillieu include NAB Capital Notes (ASX code: NABPH), Australian Unity Bonds series C and D (ASX code: AYUHC, AYUHD) and Peet Bonds 2 (ASX code: PPCHB).
BondAviser/Baillieu have Crown Subordinated Notes 2 (ASX code: CWNHB) on their “Most Expensive” list, stating a breach of its lending covenants “seems likely”, leading to the possibility Crown will not “call” the notes on the 21 July 2021 first call date.
In late November 2020, Fitch Ratings stated it was applying “a 50% equity credit” to the Crown notes for the purposes of balance sheet ratio analysis. Fitch expects “the securities to remain a permanent feature of its capital structure, based on discussions with management.” A July call would seem unlikely should Crown’s notes remain a permanent part of Crown’s balance sheet.