Trading margins of ASX-listed notes and bonds could be divided into two camps; those which moved a little and those which moved a lot. Crown Notes 2 (ASX code: CWNHB, +63bps) jumped after investors began to speculate they may be redeemed earlier than the call date in 2021. IMF Bentham Bonds (ASX code: IMFHA, +56bps) was also out of favour but it is probably some short-term mispricing regarding its interest payment on 8 April. On the other hand, Villa World Notes (ASX code: VLWHA, -47bps) were sought by investors.
AxsessToday announced it had called in administrators. It’s not a good sign for noteholders (ASX code: AXLHA) but it will be probably far worse for shareholders.
The current 3-month BBSW rate is around 1.69%. Add the trading margin from the above chart or from the tables to 1.69% 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% | 2.79% | 0.48% | 100.70 | 5.48% |
| Australian Unity | AYUHB | Unsub. Bond | 15-Dec-20 | 2.80% | 1.22% | 0.13% | 102.55 | 4.38% |
| Crown | CWNHB | Sub Note | 23-Jul-21 | 4.00% | 3.82% | 0.63% | 101.00 | 5.66% |
| Bentham IMF | IMFHA | Bond | 31-Jan-22 | 4.20% | 4.07% | 0.56% | 100.60 | 5.86% |
| Nat Aust Bank | NABPE | Sub Note T2 | 20-Jun-23 | 2.20% | 1.69% | 0.12% | 102.36 | 3.81% |
| Peet | PPCHB | Bond | 5-Oct-22 | 3.65% | 4.37% | -0.03% | 101.20 | 6.28% |
| Qube Holdings | QUBHA | Sub Note | 5-Oct-23 | 3.90% | 1.93% | 0.07% | 107.80 | 5.19% |
| Tatts | TTSHA | Snr. Bond | 5-Jul-19 | 3.10% | 2.26% | -0.01% | 100.30 | 4.78% |
| Villa World | VLWHA | Snr. Bond | 21-Apr-22 | 4.75% | 4.13% | -0.47% | 101.65 | 6.33% |