For the past few years, ASX-listed corporate debt and hybrid securities have dwindled leaving investors with a shrinking opportunity set to diversify outside the AT1 capital instrument market. This reduction in supply began with the Origin and Woolworths Subordinated Notes (ASX: ORGHA, WOWHC) being called at the end of 2016. This was followed by Caltex, Goodman and Tabcorp redeeming their [...]
Last week, global equity markets experienced a severe sell-off which originated for the US following better than expected wage inflation data. While this is generally an indication of a strengthening underlying economy, equity investors were spooked of the idea that the era of easy month (and hence the return of a free flowing economy) was coming to an end. As [...]
Following a two-year long rally in trading margins, there has been increasing debate around the valuation (expensiveness) of Additional Tier 1 (AT1) hybrids. This notion refers to the true intrinsic value of these instruments which can be highly subjective among investors. There are many lenses that can be used in deciding whether an asset is either trading at fair value, [...]
In the realm of financial markets, a key topic of interest for many investors is performance attribution. Specifically, this refers to the individual components that form a security, portfolio or market’s total return over a pre-set time period. Depending on the required granularity of one’s analysis, the components can be broken down into many factors which can then be utilised [...]
Credit Performance... 2017 has been another strong year for the ASX-Listed Debt & Hybrid market with accommodative issuer fundamentals and strong market technical factors (demand and supply). Consequently, trading margins across most securities have marched lower, which has extended the almost 2-year tightening cycle since the last severe sell-off in February 2016. As a result (figure 1), 2017 has been [...]
In the Australian fixed income market, the vast majority of debt instruments pay interest periodically and repay principal upon maturity (or an optional call date), providing flexibility in managing cash flow and asset/liability matching risks. In comparison to the “interest only” payment structure, is another type of bond structure known as “amortising”, which distributes principal and interest (P&I) distributions periodically, [...]
Despite mixed economic signals, Australian investors are generally preparing for the rising interest rate environment in coming years. While the Reserve Bank of Australia (RBA) has kept the cash rate on hold for 15 consecutive months, there is consensus that the next move will be up with only timing being the real unknown. Consequently, a question that has been raised [...]
Earlier this week marked the debut of new wholesale bonds from New South Wales electricity distribution company, Ausgrid (previously known as Energy Australia). The transaction raised $1.2 billion over a fixed rate ($750 million) and floating rate tranche ($450 million), and was the largest Australian corporate issuance since Telstra’s $1 billion issuance (three tranches) in April this year. The 7-year [...]
In recent years, unlisted Queensland sugar milling company Mackay Sugar has come under intense financial pressure. This has been largely attributable to the significant debt pile the company has accumulated over the past decade, which has left management no choice but to explore recapitalisation options. As we would expect with any agricultural company, Mackay Sugar is heavily capital intensive and [...]
As history has shown, technological advancement is inevitable. Facebook invented the concept of social media advertising, Amazon’s rise of e-commerce power is currently revolutionising the retail industry and share-ride app Uber has permanently altered people's transport options. History has also shown that companies who fail to adapt to technological transitions generally become obsolete. A stark example of this is the [...]
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ABN 31 164 148 467 ‧ Important Information
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
