We have now added four tranches of the massive BHP subordinated bond issue to the DirectBonds list. Minimum sized parcels vary and currencies include: USD, GBP and EUR. The relevant company news this week includes: BlueScope released a 1H16 trading update and an acquisition announcement, Newcrest reported a moderately weak September quarter and Qantas continues to report strong growth in the month of September
BHP Billiton subordinated foreign currency bonds now available
Last week we reported BHP’s two USD were available, the remaining Sterling and a Euro tranche have been added to the DirectBonds list. So now, the choice is yours. You can invest in an investment grade credit, household name in: US dollar, Euro or Great British Pounds. These bonds are available to wholesale investors with minimum parcel size starting from 100,000 to 200,000 in the respective currencies.
Currently the USD bond with a first call date of 20 October 2025 are trading at a yield to first call of around 6% (indicative only and subject to change).
See the factsheets below for a summary of each bond. Please note the factsheets should not be viewed as credit research.
BlueScope
BlueScope has released a 1H16 trading update to the market today as well as announcing the acquisition of the remaining 50% stake in North Star BlueScope LLC. The news has been positively received by the market, with the share price up 10.6% for the day. For the full update including key highlights from the trading update and a summary on the North Star Acquisition click here.
Links to the ASX releases from BlueScope are below:
Trading update
North Star acquisition
Newcrest
The company reported a moderately weak result for the September quarter compared to previous periods, with gold production down 13.3% on the previous quarter at 583,745 ounces. Production was adversely impacted by two fatalities at the Hidden Valley and Cadia mines as well as unplanned maintenance activities. However, management has reaffirmed its full year production guidance of 2.4 to 2.6 million tonnes per annum (mtpa).
Despite a fall in gold prices over the quarter, the average realised gold price in AUD was up 1.3% to $1,552 per ounce due to the weakening of the dollar. The all in sustaining cost margin fell to 30% from 36% in the previous quarter but still remains relatively solid.
Newcrest announced an operational failure in one of Cadia’s mills which accounts for about 75% of mine output. While the mill is offline, excess mine production is being stockpiled on the surface to be processed later in FY16. The operational problem at Cadia is the main near term issue for the credit with the mine contributing to about 70% of group cash generation for the September quarter. However, once the operational problem is resolved it is expected that production and financial performance will recover later this financial year.
Qantas
The airline reported strong growth in its monthly traffic and capacity numbers for September. Group capacity increased by 3.6%, revenue passenger kilometres were up 5.5% and FY16 year-to-date passenger numbers have increased by 2.1%. The airline has hedged approximately 95% of its fuel requirements for the remainder of the financial year.