Summary: Trading margins mostly lower; Peet Bonds favoured by investors; Omni Bridgeway, Qube Notes the opposite; Bell Potter “sees value” in Crown Notes.
Trading margins of ASX-listed notes and bonds mostly fell this week with the trading margin of Peet Bond’s (ASX code: PPCHB, -97bps) experiencing the largest fall over the week. There were some notable exceptions; trading margins of Omni Bridgeway Bonds (ASX code: OBLHA, +60bps) and Qube Notes (ASX code: QUBHA, +36bps) moved significantly in the other direction. Other movements over the week were quite modest except for some short-dated securities.
Bell Potter’s fixed interest team said it sees “value” in Crown Notes 2 (ASX code: CWNHB) at $94.85 “following the material reduction in risk profile from no new Victorian coronavirus cases since 30 October. Crown’s notes have a July 2021 call date with various conditions attached.
The current 3-month BBSW rate is just above zero. Add the trading margin from the above chart or from the tables to this figure for an estimate of the 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** |
|---|---|---|---|---|---|---|---|---|
| Australian Unity | AYUHB | Bond Series B | 15-Dec-20 | 2.80% | -1.24% | -4.83% | 100.6 | 2.81% |
| Crown | CWNHB | Sub. Note | 23-Jul-21 | 4.00% | 13.11% | -2.50% | 95 | 4.26% |
| Omni Bridgeway | OBLHA | Bond | 31-Jan-22 | 4.20% | 5.49% | 0.60% | 99.01 | 4.28% |
| Peet | PPCHB | Bond | 5-Oct-22 | 3.65% | 5.17% | -0.97% | 99.705 | 4.71% |
| Nat. Aust. Bank | NABPE | Sub. Note Tier 2 | 20-Jun-23 | 2.20% | 1.86% | -0.11% | 101.29 | 2.20% |
| Qube Holdings | QUBHA | Sub. Note | 5-Oct-23 | 3.90% | 2.59% | 0.36% | 104 | 3.78% |
| Australian Unity | AYUHC | Bond Series C | 15-Dec-24 | 2.00% | 2.50% | -0.15% | 98.35 | 2.06% |
| Australian Unity | AYUHD | Bond Series D | 15-Dec-26 | 2.15% | 3.01% | -0.05% | 95.75 | 2.27% |