Trading margins of ASX-listed notes and bonds dropped back a sizable amount this week as yields on a few securities fell by sizable amounts. The median trading margin fell from 2.18% to 1.70% on the back of lower trading margins of AGL Notes (AGLHA, -48bps), Tatts Bonds (ASX code: TTSHA, -33bps) and Crown Notes 2 (ASX code: CWNHB, -31bps).
APA Group Notes (ASX code: AQHHA) will be redeemed for $100 face value plus $1.551 interest on 31 March 2018. The last day of ASX trading will be on 21 March 2018. (Beware seemingly-attractive trading margins on short-dated securities; transaction costs may eat up a significant amount of the gross return.)
The current 3 month BBSW rate is around 1.80%. Add the trading margin from the above chart or from the tables to 1.80% for a 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 FLOATING RATE NOTES
| COMPANY | CODE | BOND TYPE | MATURITY | ISSUE MARGIN | TRADING MARGIN | Δ WEEK | WEEK CLOSE | RUNNING YIELD** |
|---|---|---|---|---|---|---|---|---|
| AGL | AGLHA | Sub Note | 8-Jun-19 | 3.80% | 1.70% | -0.48% | 102.55 | 5.44% |
| AMP | AMPHA | Sub Note II | 18-Dec-18 | 2.65% | 0.97% | -0.30% | 102.25 | 4.38% |
| APT Pipelines | AQHHA | Sub Note | 31-Mar-18 | 4.50% | 4.66% | 1.21% | 101.00 | 6.29% |
| Australian Unity | AYUHB | Unsub. Bond | 15-Dec-20 | 2.80% | 1.40% | -0.03% | 104.25 | 4.42% |
| Crown | CWNHA | Sub Note | 14-Sep-18 | 5.00% | 3.30% | -0.01% | 102.40 | 6.72% |
| Crown | CWNHB | Sub Note | 23-Jul-21 | 4.00% | 3.47% | -0.31% | 102.99 | 5.69% |
| Bentham IMF | IMFHA | Bond | 30-Jun-19 | 4.20% | 2.74% | 0.07% | 102.80 | 5.87% |
| Nat Aust Bank | NABPE | Sub Note T2 | 20-Jun-23 | 2.20% | 1.58% | 0.05% | 103.85 | 3.87% |
| Qube Holdings | QUBHA | Sub Note | 5-Oct-23 | 3.90% | 3.70% | 0.01% | 105.93 | 5.41% |
| Suncorp-Metway | SUNPD | Sub NoteI T2 | 21-Nov-18 | 2.85% | 1.36% | 0.03% | 101.20 | 4.58% |
| Tatts | TTSHA | Snr. Bond | 5-Jul-19 | 3.10% | 1.03% | -0.33% | 103.50 | 4.75% |
| Villa World | VLWHA | Snr. Bond | 21-Apr-22 | 4.75% | 4.08% | 0.01% | 103.25 | 6.37% |
| Westpac | WBCHB | Sub Note T2 | 22-Aug-18 | 2.30% | 0.85% | -0.48% | 100.79 | 4.06% |