Tuesday 20 November 2018 by FIIG Research Trade opportunities

Two new DirectBonds – two Australian companies

AMP and Merredin Energy are the latest additions to the DirectBonds list with Merredin now available to retail investors. While AMP is investment grade, Merredin is high yield 



The AMP group is Australia and New Zealand’s leading wealth management company, with an expanding international investment management business and a growing Australian retail banking business. Founded over 170 years ago, AMP has extended its expertise to advise clients and customers in Asia, the Middle East, Europe, the United Kingdom, and North America.

The AMP group is focused on three main operating businesses: Australian Wealth Management, AMP Capital, and AMP Bank. The issuer of the notes, AMP Limited (AMP) is the non-operating holding company of the AMP group.

AMP’s 2023 call bond will partially refinance AMP’s outstanding AUD325m Tier 2 note due to be called in December 2018.  Despite AMP’s turbulent year, there was strong demand for this issuance, which was about 1.5 times oversubscribed, meaning demand strongly outweighed supply.

The notes are an attractive investment from an investment grade issuer, only available to wholesale client only and offer strong relative value compared to its Tier 2 peers with similar ratings.  

AMP November 2028 floating rate notes | View Factsheet*

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Merredin Energy – available to retail investors

Merredin Energy owns and operates an 82 megawatt diesel powered peaking power station in Western Australia, 260km east of Perth. The power station is a modern, state-of-the-art peak generation facility with an expected life of at least 25 years. It is a fast response generator capable of rapid and remote start up to supply electricity to the South West Interconnected System (SWIS) at periods of peak demand.

Merredin Energy earns most of its revenue from Reserve Capacity Payment paid by AEMO, the market operator representing the capacity that Merredin Energy makes available to the system if required. Only a small portion of total revenue is generated from electricity sales, since the power plant is rarely required to produce. The Reserve Capacity Price is determined annually based on forecast electricity demand and total electricity generation capacity.

The Merredin Energy 2022 fixed rate notes offer investors high yield exposure to the electricity sector and better relative value when compared to its peers.

The notes are now available to retail and wholesale investors.

Merredin Energy November 2022 fixed rate bond | View the retail research report

For more information, please call your relationship manager or contact Chris Ip on 1800 01 01 81.