Week in review
Last week, the ‘big 4’ banks increased their variable mortgage rates, to compensate for higher capital requirements due to be implemented mid-2016. Yields finished marginally lower, with government bonds down at 1.82% and 2.61% for the 3 year and 10 year respectively. In trading, the highlight was BHP Billiton bonds with four out of five lines added to the DirectBonds list
Company updates
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
Week in review
We have added the BHP Billiton USD hybrid issues to the DirectBond list. The two USD lines are a part of the renowned mining, metals and petroleum company’s issue of the largest corporate hybrid in 2015 to date. On the trading front, supply remains good in the Asciano floater and Sun Group fixed rate bonds as high quality investment grade options. While popularity in trading BlueScope and Barminco USD bonds continues
Opinion
The massive BHP hybrid issue last week highlights the attractive, predictable fixed income returns available in the resources sector. We assess the relative merits of investing in resources for shares and bonds and recommend strategies for both
Trade opportunities
BHP Billiton (rated A+/A1), an ASX-listed multinational mining company, has announced that it has successfully issued a multi-tranche, multi-currency subordinated bond which it expects to settle next week. In what has been a turbulent environment for commodities, the BHP bond issue has received strong support from the institutional market