Last Friday saw the completion of the bookbuild for the National Australia Bank’s Capital Notes 2 (ASX Code: NABPD) at a margin of 4.95% p.a. above the 90-Day BBSW (low end of the range offered of 4.95 - 5.10%). The deal was closed early with an offer size of at least $1.35 billion, up from the initial target of $750 [...]
While The Federal Reserve Chair, Janet Yellen, has not detailed the exact timing, there is growing consensus that the second rate hike of the current cycle could happen as soon as mid-June off the back of an improved labour market. As a result, employment data to be released this Friday will be a key factor in determining how soon the [...]
Last Monday saw the completion of the Bookbuild for the Westpac Capital Notes 4 (WBCPG) at a margin of 4.90% p.a. above the 90-Day BBSW. The deal was closed at an offer size of $1.45 billion, up from the initial target of $750 million. This indicates there is still substantial demand for high-yielding hybrid securities in a low interest rate [...]
With the successful closure of the second major bank Tier 1 hybrid book build of 2016, now is a good time revisit why these securities are issued and look at how these securities dominate the overall ASX listed interest rate securities universe. Generally speaking, the banks, insurance and diversified financial sector issue these securities to satisfy regulatory capital requirements (Figure [...]
Corporates tend to get overshadowed in a market dominated by banks but careful security selection could have warranted significant returns over the course of the current financial year. The smallest security on issue, Peet's Convertible Note (PPCG) was the ASX's best performer over the past 12 months, benefiting from a hot property market and prudent capital management policies, while Seven Group's TELYS4 [...]
The minutes from the Reserve Bank meeting released last week showed that the rate cut was line ball while minutes from the Federal Reserve meeting confirmed that June is “live” for the next rate hike. The key message from the RBA was that they are concerned by the sudden disinflation and worried that it could become entrenched. This is [...]
Markets ended the week stronger as positive news for the healthcare sector (the government is deferring bulk-bill incentive cuts for pathology) was also supported by the ongoing rally in bank senior debt. Last week the average Major Bank 5-Year CDS (a proxy for their cost of new debt) reached its lowest point (0.98%) since January 2016. While we are still [...]
Figure 1: How Yields Have Moved Over the Past 9 Years Source: BondAdviser, Bloomberg & the RBA
On the 16th May 2016 the Australian Government 10-Year Bond Yield dropped to a record low of 2.22% as the interest rate futures market reacts to a period of possible disinflation. This has been a driving force behind the bond markets outperformance year to date (AUSBond Composite 3.65% YTD, vs ASX200 Accumulation 2.40%). While this is good for those who [...]
With the AFR’s Street Talk yesterday reporting that Westpac Banking Corporation is on the verge of announcing the second new Tier 1 Hybrid issue of 2016, presumably to replace the $762.7 million Westpac Trust Preferred Security (TPS) (ASX Code: WCTPA), this is an opportune time to revisit how this segment of the ASX-listed hybrid universe has fared since the first [...]
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This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
