Trading margins of ASX-listed notes and bonds dropped back as most spreads (to BBSW) on most securities in this space tightened. The largest movements were not confined to those with 2018 maturities; spreads on some 2019 maturities also fell significantly and the median trading margin moved from 2.80% to 1.81%. (Ed: this measure is becoming less useful as the universe of securities in the sector contracts.)
Major movers included Suncorp Notes (ASX code: SUNPD, -163bps) and Bentham IMF bonds (ASX codE: IMFHA, -121bps), which largely reversed their respective 188bps and 99bps increases in the previous week. Tatts Bonds (ASX code: TTSHA, 97bps) and AMP Notes (ASX code: AMPHA, -84bps) also stood out.
The current 3 month BBSW rate is around 2.03%. Add the trading margin from the above chart or from the tables to 2.03% 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% | 1.76% | -0.40% | 102.73 | 5.69% |
| AMP | AMPHA | Sub Note II | 18-Dec-18 | 2.65% | 0.64% | -0.84% | 101.59 | 4.61% |
| Australian Unity | AYUHB | Unsub. Bond | 15-Dec-20 | 2.80% | 1.28% | -0.10% | 104.80 | 4.64% |
| Crown | CWNHA | Sub Note | 14-Sep-18 | 5.00% | 4.06% | 0.09% | 100.75 | 6.99% |
| Crown | CWNHB | Sub Note | 23-Jul-21 | 4.00% | 3.81% | 0.07% | 101.00 | 5.98% |
| Bentham IMF | IMFHA | Bond | 30-Jun-19 | 4.20% | 2.54% | -1.21% | 101.90 | 6.10% |
| Nat Aust Bank | NABPE | Sub Note T2 | 20-Jun-23 | 2.20% | 1.72% | 0.02% | 102.45 | 4.13% |
| Qube Holdings | QUBHA | Sub Note | 5-Oct-23 | 3.90% | 3.69% | -0.05% | 105.00 | 5.64% |
| Suncorp-Metway | SUNPD | Sub NoteI T2 | 21-Nov-18 | 2.85% | 1.80% | -1.63% | 101.15 | 4.84% |
| Tatts | TTSHA | Snr. Bond | 5-Jul-19 | 3.10% | 0.63% | -0.97% | 103.00 | 4.97% |
| Villa World | VLWHA | Snr. Bond | 21-Apr-22 | 4.75% | 4.45% | 0.16% | 102.50 | 6.69% |
| Westpac | WBCHB | Sub Note T2 | 22-Aug-18 | 2.30% | 1.81% | -0.19% | 100.60 | 4.32% |