Tuesday 25 October 2016 by Elizabeth Moran Trade opportunities

AXA and CBL call bonds – suggestions to reinvest

With thousands of investors due to be paid out to around $800 million dollars in the next week, competition for available bonds will be fierce

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AXA SA, the French life insurer has called its two Australian dollar denominated bonds. Funds are due to be repaid to clients today, Wednesday 26 October. While CBL, another insurer domiciled in New Zealand but which coincidentally also has business in France, has also called its FIIG originated bond. It is due to be repaid next Monday 31 October.

With thousands of investors due to be paid out circa $800 million dollars in the next week, competition for available bonds will be fierce.

Many of our investors have taken profit on the AXA bonds over the years, with most of those trading in the last year. One of the benefits of exiting early was not to have the bonds maturing at the same time as everyone else and thus possibly providing better circumstances in which to reinvest.

The unfortunate coincidence of three bonds being repaid in less than a week will be the scramble for available bonds. If you have been thinking about realising some of your investments, now would certainly be a good time with demand likely outstripping supply.

That said if you are keen to reinvest a quick call to your dealer to let them know what you’re thinking will help them put in your order quickly and give you the best chance of securing available bonds.

Below are three tables suggesting some alternatives. The first is investment grade for those wanting to replace AXA which was also investment grade.

The second and third shows some high yield alternatives for CBL, including some USD bonds which remain popular. 

Investment grade – Australian dollars

Company Call date Maturity date Bond type Capital structure Yield to maturity Income/running yield
Suncorp subsidiary, AAI Ltd 06/10/2022 06/10/2042 Floating Subordinated debt 4.58% 4.74%
Bank of Queensland 10/05/2021 10/05/2026 Floating Subordinated debt
4.15% 4.90%
Genworth Financial Mortgage 03/07/2020 03/07/2025 Floating Subordinated debt 5.03% 5.15%
Members Equity Bank 29/08/2019 29/08/2024 Floating Subordinated debt
4.25% 4.40%
Qantas Airways Limited
12/10/2026 Fixed Senior debt 4.42% 4.63%
Rabobank Netherlands AU   11/04/2024 Fixed Senior debt 3.46% 4.86%
Sydney Airport   20/11/2030 Inflation Linked Senior debt 5.80% 3.19%


Rated high yield – US dollar bonds

Company Credit rating Maturity date Bond type Capital structure Yield to maturity Income/running yield
Dell Inc BB- 15/04/2028 Fixed Senior debt 5.98% 6.50%
Navient Corp BB- 01/08/2033 Fixed Senior debt
7.26% 6.68%
NCIG Holdings B 31/03/2027 Fixed
Senior debt
10.09% 10.84%
TransAlta Corp BBB- 15/11/2022 Fixed
Senior debt
4.22% 4.43%
Virgin Australia B3 15/10/2021 Fixed
Senior debt
7.08% 7.63%


Unrated high yield – Australian dollars

Company Maturity date Bond type Capital structure Yield to maturity Income/running yield
Impact Group Aus 12/02/2021 Fixed Senior debt 7.86% 8.35%
W A Stockwell 29/06/2021 Fixed Senior debt
6.87% 7.56%
Adani Abbot Point Terminal 29/05/2020 Fixed Senior debt
6.78% 7.03%
PMP Finance 17/09/2019 Fixed
Senior debt
5.80% 6.33%
SCT Logistics 24/06/2021 Fixed
Senior debt
5.88% 7.14%
Note: Price are accurate as at 24 October 2016 but subject to change
Black = retail and wholesale investors; Red = wholesale only



Call options

Call options allow the issuer to repay the bond prior to the stated maturity date of the bond. This feature is called an option because the issuer has the right but not an obligation to repay the debt early. In this instance, the issuer has a call option over their issue.

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6% pa* with Corporate Bonds

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