Corporate Hybrids 2017 Handbook 2017 Handbook Credit Research Corporate Hybrids The BondAdviser Corporate Hybrid Handbook 2017 is designed to be a useful reference for ASX- listed corporate hybrid securities and the credit profiles of their underlying issuers. We believe Jack Pobjoy there are a number of attractive investment opportunities across different corporate industries and Credit Analyst the recommendation table below reflects our views on these particular securities. (+61) 3 9670 8615
[email protected] Corporate hybrids are overshadowed in a market dominated by banks and other financial Nicholas Yaxley institutions. As a result, many investors fail to reap the diversification benefits that non-financial Head of Research issuers offer in a balanced portfolio. While bank and other financial hybrids are often driven by (+61) 3 9670 8615 macro-economic, regulatory and/or political themes and trends, corporate hybrids warrant a more
[email protected] case-by-case approach which promotes diversification. For this reason, corporate hybrids should not be overlooked. Given the ‘lower-for-longer’ interest rate environment, the search for yield is becoming an increasingly difficult task. While hybrids continue to be an attractive option to boost income, they are not without inherent risks. Figure 1. Summary of Recommendations Buy Hold Sell APA Group Subordinated AGL Subordinated Notes Notes (AQHHA) (AGLHA) Crown Subordinated Notes I Goodman Preferred Step- (CWNHA) Up Securities (GMPPA) Crown Subordinated Notes II Origin Energy (ORGHA) (CWNHB) Seven TELYS4 (SVWPA) Ramsay CARES (RHCPA) Woolworth Subordinated Notes (WOWHC) Caltex Subordinated Notes (CTXHA) Tabcorp Subordinated Notes (TAHHB) Multiplex SITES (MXUPA) Nufarm Step-Up Securities (NFNG) Source: BondAdviser Tatts Bonds (TTSHA), Peet Bonds (PPCHA) and Qube Subordinated Notes (QUBHA) are excluded from this report as they are not considered hybrid securities.