National Australia Bank Subordinated Notes 2 (ASX code: NABPE) began trading on a deferred delivery basis on the ASX this week. The first trade was at $100.80 and the notes finished the day at $100.50, a small premium to their $100 face value. They have a first call date of 20 September 2023, a final maturity date of 20 September 2028 and an issue margin of 2.20% above BBSW (an initial yield just under 4.00%). Normal trading is expected to begin on 27 March.
Since the issue was announced at the beginning of February, margins on ASX listed notes have fallen with the median trading margin moving from 1.71% on the day of the announcement to 1.62% on the day before trading commenced. The diagram below shows how notes of banks and other financial institutions have fared over that period. Perhaps it is not coincidental NAB subordinated Notes 1 have performed the worst of this type of security and its trading margin has risen by the largest amount.
