Tuesday 04 September 2018 by Stephen Mackie Trade opportunities

FIIG active portfolio for August

FIIG active portfolio for AugustKey features of the August active portfolio

Weighted average yield to maturity               5.71%pa
Weighted average running yield                    6.09%pa
Weighted average term until maturity            5.39 years 

• Assume a face value of $100,000 per bond
• AUD/USD spot rate 0.719

The portfolio held 10 bond issues from nine issuers – two bonds were from Liberty Financial. The active portfolio was as follows:

Issuer

Description

Aroundtown SA

Aroundtown is a German based real estate company. It focuses on income generating quality properties with value add potential in central city locations, primarily in Germany and the Netherlands. Aroundtown has a strong competitive position with a EUR10.9bn commercial portfolio and market capitalisation of EUR7.3 bn. It consistently executes its announced strategies and has a strong and established track record in growing and managing its asset portfolio. The bond is investment grade.

Barminco Finance Pty Ltd (USD)

Barminco is a WA based private Australian company operating in the global underground hard rock development and production contract mining industry. Barminco’s ability to renew and extend contracts is underpinned by its ability to maintain long term relationships with a diversified base of the world’s largest resource companies as well as mid-tier companies. Last month Ausdrill made a takeover bid for the company, increasing the bond price.

IAMGOLD (USD)

With headquarters in Toronto, Canada, IAMGOLD is a mid-tier mining company with four gold mines on three continents - West Africa, North and South America, as well as development and exploration projects. IAMGOLD is listed on the Toronto and New York Stock Exchanges, with a market capitalisation of USD2.48bn as at 4 September 2018. As at 31 December 2017, IAMGOLD had cash and cash equivalents of approximately USD816m and USD249m available under its revolving credit facility.

Liberty Financial Pty Ltd

Liberty is a leading specialty financial services company with operations across Australia and New Zealand. Since it began in 1997oit has become a leading non bank lender through its use of technology. S&P views Liberty’s business as sound and defendable, underpinned by its ability to write a variety of loans.

Maurice Blackburn

Maurice Blackburn (MB) is one of Australia’s leading consumer law firms with almost 100 years of history. MB has leading positions in the personal injury litigation sector and the largest class actions practice in Australia. MB benefits from stable industry dynamics in the personal injury, superannuation/insurance and class actions sector. Approximately 75% of revenue is derived from personal injuries which exhibits low correlation to the macroeconomic cycle.

Next Generation Clubs

Next Gen owns and operates six health clubs across Australia and in New Zealand. It has approximately 28,000 members. The clubs differentiate themselves as a higher end multi service offering with facilities including tennis and squash courts, indoor and outdoor pools, spas, saunas, café and lounge, function rooms and full service gyms. Next Gen benefits from diversity of club location and some diversity of revenue streams. Compared to typical gym members, Next Gen’s members are generally more affluent, older, potentially value a multi-service offering more and are less likely to be “gym hoppers”.

Sydney Airport Finance

Sydney Airport Finance is a financial subsidiary of Sydney Airport Corporation, who are the lessee and operator of Sydney’s Kingsford Smith Airport, being Australia’s largest airport. Sydney has Australia’s largest airport which remains the key national hub both domestically and internationally. Sydney Airport also has significant revenue diversification through a number of revenue streams.

Virgin

Virgin is the second largest airline in Australia. Virgin has strong support from its strategic shareholders providing access to additional equity if required. There is a strong alignment of interest between Virgin’s institutional shareholders and the continued operation and success of Virgin.

Zenith Energy Ltd

Zenith is a Perth based independent power producer specialising in providing electricity to off-the-grid sites, primarily targeting the mining sector. Zenith currently operates 12 contracts. The bonds are subordinated and benefit from a second ranking security over most of Zenith’s assets. About 90% of revenue is generated from long term contracts which provide great certainty about likely earnings in the near term.



If you would like more information, please call your local relationship manager. If you are new to bonds, please call 1800 01 01 81 to speak to one of our experts.

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