This week, we’ve seen a number of new corporate bonds in the domestic market. As of close of business on Tuesday 13 August 2024:
- BNP Paribas is taking expressions of interest for a 10NC5 (10-year, non-call 5) subordinated kangaroo with a fixed to floating and/or floating with price guidance of 230bps over swap
- Macquarie Bank launched a 10.5NC5.5 in a subordinated Tier 2 transaction, with price guidance of 200bps over swap. The bank printed $1.25 billion at a reduced margin:
- $350m fixed to floating tranche with a 5.603% issue yield
- $900m floating at 185bps over 3 month BBSW
- ING Australia has launched a three and five-year senior unsecured bond. The three-year, fixed and/or floating tenor has price guidance of 90bps over swap, while the five-year, floating, guidance is 105bps over swap
- Mirvac has mandated a domestic senior unsecured green deal. They are seeking six or six-and-a-half-year fixed funding. Lead managers are ANZ, Mizuho Securities and Westpac Institutional Bank.
Private credit is blooming. Last week I listened to an excellent PGIM panel webinar that gave fantastic insight into the asset class. Three guests, including global heads, from one of the world’s largest non-bank lenders discussed what the market is like today compared to pre-GFC; what is concerning regulators now; the questions and due diligence they ask originators (they originate as well) and where they see opportunities. This is a quite technical article and probably more for institutional investors but there are some really valuable insights for individual investors as well. The US market is more mature than Australia, but I got so much out of this presentation, as I hope you will.
Late last week IAM’s Matthew Macreadie issued a Suncorp Tier 2 trade suggestion, which shows deep understanding of bank capital management, and the opportunity post Suncorp’s acquisition by ANZ.
I really like articles that discuss multiple asset classes and give whole portfolio suggestions. Stephen Dover from Franklin Templeton looks at what market dislocation means for global equities, global fixed income and alternatives.
Volatility has increased and the VIX has risen steeply. Robert Almeida Jr, of MFS Investment Management discusses some general market themes including AI and its capital requirements and cites a fabulous comment written more than 150 years ago by Louis Gave:
Panics do not destroy capital. They merely reveal that extent for which it has been prematurely destroyed by its betrayal into hopelessly unproductive works.
Finally, we have a Betashares wrap of the ever-growing ETF industry.
