Trading margins of ASX-listed notes and bonds increased for a second week in a row. The median trading margin increased by 46bps to 2.23% as trading margins of all but a few securities increased.
One of the main drivers were AGL subordinated notes (ASX code: AGLHA, +47bps). AGL’s ordinary share price has been under pressure in recent weeks and the margin on its subordinated notes has just reached its highest point since December 2016.
The current 3 month BBSW rate is around 1.77%. Add the trading margin from the above chart or from the tables to 1.77% 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% | 2.23% | 0.47% | 103.10 | 5.45% |
| AMP | AMPHA | Sub Note II | 18-Dec-18 | 2.65% | 1.32% | 0.44% | 101.85 | 4.36% |
| APT Pipelines | AQHHA | Sub Note | 31-Mar-18 | 4.50% | 3.05% | -2.50% | 100.95 | 6.25% |
| Australian Unity | AYUHB | Unsub. Bond | 15-Dec-20 | 2.80% | 1.16% | -0.05% | 104.75 | 4.37% |
| Crown | CWNHA | Sub Note | 14-Sep-18 | 5.00% | 3.57% | 0.43% | 102.05 | 6.70% |
| Crown | CWNHB | Sub Note | 23-Jul-21 | 4.00% | 3.93% | 0.05% | 101.45 | 5.73% |
| Bentham IMF | IMFHA | Bond | 30-Jun-19 | 4.20% | 2.60% | 0.18% | 102.80 | 5.83% |
| Nat Aust Bank | NABPE | Sub Note T2 | 20-Jun-23 | 2.20% | 1.54% | 0.22% | 103.90 | 3.83% |
| Qube Holdings | QUBHA | Sub Note | 5-Oct-23 | 3.90% | 3.64% | 0.01% | 106.85 | 5.33% |
| Suncorp-Metway | SUNPD | Sub NoteI T2 | 21-Nov-18 | 2.85% | 1.33% | 0.03% | 101.10 | 4.56% |
| Tatts | TTSHA | Snr. Bond | 5-Jul-19 | 3.10% | 0.94% | -0.35% | 103.50 | 4.72% |
| Villa World | VLWHA | Snr. Bond | 21-Apr-22 | 4.75% | 3.94% | 0.18% | 103.50 | 6.32% |
| Westpac | WBCHB | Sub Note T2 | 22-Aug-18 | 2.30% | 1.32% | 0.01% | 100.451 | 4.04% |
** Clean running yield.
Dealing: contact Michael Saba, Evans & Partners. +61 3 9631 9813