Tuesday 03 July 2018 by Stephen Mackie Trade opportunities

FIIG active portfolio for June

Did you trade last month? Find out if it was in one of our most actively traded securities as we present the Top 10 June trades  


Key features of the June active portfolio

  • Assume a face value of $200,000 per bond
  • AUD/USD spot rate 0.734

The ten issuers in the active portfolio were as follows:

Issuer Description
StockCo StockCo Group Australia (StockCo) is an Australian niche provider of a specialty agricultural finance used to fund the “finishing” phase of livestock’s growth. Unlike other assets, livestock naturally appreciates in value and therefore, StockCo’s security position improves over time. This is an important point of difference between this collateral and may other forms of asset financing where the asset depreciates in value, such as car loans.
Virgin Virgin is the second largest airline in Australia. Virgin has strong support from its strategic shareholders providing possible additional support if needed. There is a strong alignment of interest between Virgin’s institutional shareholders and the continued operation and success of Virgin.
Axsesstoday Axsesstoday Group (Axsess) provides commercial equipment finance to small businesses via a distribution channel of retailers and referrers. Axsess has a strategic point of difference in allowing retailers to brand the equipment. It has efficient diversification of its loan book with no single customer representing more than 1% of net loans.
Challenger Challenger Life Company Limited (CLC) is a member of the Challenger Group, an investment management group operating primarily in Australia. Challenger is listed on the Australian Securities Exchange (ASX), under the code ‘CGF’, has a market capitalisation of AUD7.35bn as at 3 July 2018 and is one of Australia’s 100 largest listed companies. Challenger is expected to benefit greatly from the scheduled increase of mandatory superannuation contributions (from 9.5% to 12%).
Metro Metro is a privately owned, non-ADI, prime commercial auto and equipment lender. The company has nationwide coverage with focus on the eastern seaboard. Metro retains all credit decisions regarding lending approvals, which means that brokers do not have any delegated lending authority. Since inception, Metro has experienced strong credit growth. The total portfolio at the end of March 2018 was $550m.
Next Generation Clubs Next Generation Clubs (Next Gen) owns and operates six health clubs across Australia and in New Zealand. It has approximately 28,000 members. NextGen benefits from low operating leverage and a low fixed cost base and membership is forecasted to grow rapidly in the coming years due to the development of new centres.
JEM (Southbank) JEM( Southbank) Pty Ltd (Southbank) is the financing vehicle for Axiom Education Queensland Pty Ltd ("Axiom Qld"). Axiom Qld was contracted by the State of Queensland to design, build and maintain facilities at the Southbank Institute of Technology in Brisbane, under a public private partnership (PPP) arrangement. The project has entered a low risk, operational stage with low cash flow volatility. The revenue stream received by JEM comes from the highly rated Queensland state government and is very stable.
Sprint (USD) Sprint Corporation is the 4th largest wireless communications company in the US by customers and provides  wireline services. S&P believes that Sprint is implementing an effective turnaround strategy and improving network quality. Sprint recently recorded solid post-paid phone subscriber additions of 256,000 during the December 2017 quarter with growth expected to continue. 
Rackspace (USD) Rackspace is a leading global multi-cloud solutions provider in the business information technology market. Rackspace was founded in 1998 and has grown its revenue every year since inception to over USD2bn. A significant 99% of Rackspace’s core revenues are recurring and historical average of defection is circa 0.7%, which is among the lowest in the industry.
QBE (USD) QBE is ranked one of the top 20 general insurance and reinsurance companies in the world.  QBE has a strong global presence and diversification within its product portfolio. In Australia and New Zealand, QBE is one of the top five insurers and holds a market leading position. *please note the minimum parcel size in QBE is USD200,000 face value

Please call your relationship manager for more information on the listed bonds.