Suncorp’s latest hybrid offering was announced near the end of March and its new Capital Notes (ASX code: SUNPF) have finally began trading on a deferred delivery basis on the ASX this week, with the opening trade going through at $101.263. The notes finished the day at $101.903, a decent premium to their $100 face value. (The minimum price increment of interest rate securities traded on the ASX is 0.1 cent.) They have a 22 June 2022 call date and an issue margin of 4.10% above BBSW which provides an initial yield around 6.185%. Normal trading is expected to begin on 11 May 2017.
Since the issue was announced, margins on ASX listed notes have risen slightly. The median trading margin of ASX-listed hybrids has moved from around 3.40% on the day of the announcement to 3.28% on the day trading commenced. The diagram below shows how trading margins of non-major bank hybrids fared over that period. Suncorp CPS 2 (ASX code: SUNPC) and Insurance Australia CPS 2 (ASX code: IAGPC) should be ignored as both securities mature in 2017 and small price changes have resulted in large changes to their respective trading margins.
Suncorp’s new issue initially sought to raise $250 million but in the end over $375 million was raised. The first interest payment date is set for 18 September 2017 with the payment amount estimated to be $1.5219. The chart below shows how trading margins stood at the end of the first day’s trading.