Professional Documents
Culture Documents
Analyst
Matt Sturmer. DDI: +64 4 495 8204
Source: Forbar, Iress matt.sturmer@forbar.co.nz
This is a private communication to Forsyth Barr clients and is not for reproduction, public circulation or the use of any third party (whether in whole or in part) without the prior written consent of Forsyth Barr Limited.
AA rated 1.46% 1.47% 1.50% 1.44% 1.53% 1.36% 1.31% 1.24% 1.7
A rated 1.78% 1.69% 1.60% 1.57% 1.63% 1.50% 1.51% 1.57% 1.6
1.5
1.4
1.3
NZ v Australia: Cash Rate
1.2 AA A
Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Last 1.1
1.0
NZ OCR 6.75% 7.25% 7.75% 8.25% 2.50% 2.50% 2.50%
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Aus OCR 5.50% 5.75% 6.25% 7.25% 3.00% 4.50% 4.75%
Difference 1.25% 1.50% 1.50% 1.00% -0.50% -2.00% -2.25%
Source: Bloomberg, Forsyth Barr
Dec-04
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
1 Year Swap 6.92% 7.43% 8.46% 8.27% 2.94% 3.73% 2.87%
5 Year Swap 6.49% 6.81% 8.07% 7.49% 5.22% 5.22% 4.41%
Source: Bloomberg, Forsyth Barr
Issue Maturity Coupon Rating Term (Yrs) Yield Margin bp) 690bp PIN020
MAR010
TPW020 15/09/2012 8.50% n/r 1.3yrs 6.35% 333bp 590bp
540bp
GFN030 15/11/2012 8.30% n/r 1.4yrs 7.65% 435bp
490bp
PIN020 30/11/2012 9.00% n/r 1.5yrs 10.10% 698bp GFN030
440bp
MAR010 15/07/2013 10.50% BBB- 2.1yrs 9.20% 578bp
390bp WKS020
WIA010 15/11/2013 7.50% BBB+ 2.4yrs 5.95% 238bp TWC010 IFT070
340bp
TWC010 15/04/2014 8.50% BBB- 2.9yrs 7.00% 325bp 290bp TPW020
FBI050 GFZ010
FBI050 15/05/2014 9.00% n/r 2.9yrs 7.10% 332bp 240bp TPW100
GEF010
AIA100 27/11/2014 7.00% A- 3.5yrs 5.25% 128bp WIA010
190bp
AIA100 AIA070 MEL020
FCG010 10/03/2015 7.75% A+ 3.8yrs 5.10% 104bp 140bp ANB300
FCG010 AKC050
ANB300 13/07/2015 6.51% AA 4.1yrs 5.37% 120bp 090bp
1 2 3 4 5 6 7
AIA070 7/11/2015 7.25% A- 4.4yrs 5.75% 149bp Term (years)
IFT070 15/11/2015 8.50% n/r 4.4yrs 8.00% 374bp
Source: Iress, Forsyth Barr
GFZ010 16/05/2016 7.54% n/r 4.9yrs 6.75% 235bp
GEF010 15/10/2016 7.35% n/r 5.4yrs 6.50% 201bp Chart 5: US Treasury Bond (10yr)
MEL020 16/03/2017 7.55% BBB- 5.8yrs 6.20% 163bp %
1.4
AKC050 29/09/2017 6.52% AA 6.3yrs 5.65% 097bp
TPW100 15/12/2017 7.10% n/r 6.5yrs 6.80% 208bp 1.2
1.0
0.8
10Yr 2.53% 3.13% 3.32% 3.63% 3.51% 3.55% 3.15% 3.00% 0.2
30Yr 4.12% 4.37% 4.48% 4.70% 4.62% 4.59% 4.29% 4.26%
0.0
Jun-09
Aug-09
Oct-09
Dec-09
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
Feb-11
Apr-11
Jun-11
and conditions.
50% Floating
Recent Bond Issues
40% Fixed Issuer Maturity Coupon Rating $m Margin
Rabobank 16/05/2018 6.25% AAA 100 139bp
30%
BNZ 11/03/2014 FRN AA 400 130bp
20% Dunedin City Treasury 15/042016 FRN AA 90 107bp
HSBC 23/05/2016 FRN AA 200 125bp
10%
ANZ National Bank 27/05/2016 FRN AA 250 150bp
0%
Oct-04
Apr-05
Oct-05
Apr-06
Oct-06
Apr-07
Oct-07
Apr-08
Oct-08
Apr-09
Oct-09
Apr-10
Oct-10
Apr-11
Upcoming Maturities/Rollovers
Source: RBNZ, Forbar Issuer Maturity Size $m Coupon
ASB Bank (ABB010) 15/06/2011 200 7.03%
Balanced
Credit Years to
Security Code Maturity Coupon Yield Price Face Value Cost Income Interest payments
Rating Maturity
PGG Wrightson Fin (Crown gtd) PWF040 BB 8/10/11 8.25% 6.50% 0.32 $1.020 $15,000.00 $15,303.31 $1,237.50 Jan/Apr/Jul/Oct
ANZ ANBHA A+ 18/04/13 9.66% 6.62% 1.85 $1.066 $15,000.00 $15,990.00 $1,449.00 Apr/Oct
Tower Capital^^ TWC010 BBB- 15/04/14 8.50% 7.00% 2.84 $1.052 $10,000.00 $10,518.40 $850.00 Jan/Apr/Jul/Oct
CBA Redeemable Pref Shares^ CBAFA AA- 15/04/15 3.59% 7.27% 3.84 $0.930 $15,000.00 $13,950.00 $538.50 Jan/Apr/Jul/Oct
Genesis Energy GPLFA BB- 15/07/16 8.50% 7.69% 5.09 $1.026 $15,000.00 $15,390.00 $1,275.00 Jan/Apr/Jul/Oct
Sky Network Television^^^ SKTFA n/r 16/10/16 4.06% 7.49% 5.34 $0.910 $15,000.00 $13,650.00 $609.00 Apr/Oct
Auckland Council AKC050 AA 29/09/17 6.52% 5.60% 6.30 $1.061 $15,000.00 $15,921.50 $978.00 Mar/Sep
Total For Portfolio 6.85% $100,000 $100,723 $6,937
^^^ Rating shown for Tower is provided by AM Best. ^ Dividends are imputed with dividends reset annually at 0.75% over 1 year swap rate. Matures in 2015. Forecast 1yr swap rates assumed. ^^ Coupon rate reset annually at
0.65% over 1 year swap rate, final maturity in 2016 Forecast 1yr swap rates assumed.
High Yield
Credit Years to
Security Code Maturity Coupon Yield Price Face Value Cost Income Interest payments
Rating Maturity
Works Finance (NZ)Ltd WKS020 BBB- 15/09/12 9.65% 6.50% 1.26 $1.061 $10,000.00 $10,610.93 $965.00 Mar/Jun/Sep/Dec
GPG Finance GFN030 n/r 15/11/12 8.30% 7.65% 1.43 $1.015 $15,000.00 $15,224.47 $1,245.00 Feb/May/Aug/Nov
Prime Infrastructure PIN020 n/r 30/11/12 9.00% 10.10% 1.47 $0.988 $15,000.00 $14,823.35 $1,350.00 May/Nov
ANZ ANBHA A+ 18/04/13 9.66% 6.62% 1.85 $1.066 $15,000.00 $15,990.00 $1,449.00 Apr/Oct
MARAC Finance MAR010 BBB- 15/07/13 10.50% 9.20% 2.09 $1.041 $15,000.00 $15,616.98 $1,575.00 Jan/Apr/Jul/Oct
Genesis Energy GPLFA BB- 15/07/16 8.50% 7.69% 5.09 $1.026 $15,000.00 $15,390.00 $1,275.00 Jan/Apr/Jul/Oct
Sky Network Television^ SKTFA n/r 16/10/16 4.06% 7.49% 5.34 $0.910 $15,000.00 $13,650.00 $609.00 Apr/Oct
Total For Portfolio 7.95% $100,000 $101,306 $8,468
^Coupon rate reset annually at 0.65% over 1 year swap rate, final maturity in 2016 Forecast 1yr swap rates assumed.
$50,000
$40,000 $20,000
$20,000
Face
$30,000 $15,000
$15,000
$20,000
$10,000
$10,000
$10,000
$5,000
$5,000
$-
2011 2012 2013 2014 2015 2016 2017 $-$-
Year of Maturity 2011
2011 2012
2012 2013
2013 2014
2014 2015
2015 2016
2016 2017
2017
Year
YearofofMaturity
Maturity
Maturity Profile - Balanced
$35,000
Portfolio Summary
$30,000 Conservative Balanced High Yield
$25,000 Face Value $100,000.00 $100,000.00 $100,000.00
Face Value
$20,000
Cost $103,841.06 $100,723.20 $101,305.73
Estimated Income (gross p.a.) $6,542.75 $6,937.00 $8,468.00
$15,000
Average Coupon Rate 6.58% 7.01% 8.52%
$10,000
Average Yield 5.85% 6.85% 7.95%
$5,000 Average Duration (years) 3.34 3.18 2.36
$-
2011 2012 2013 2014 2015 2016 2017
Year of Maturity
* Running Yield = Current Coupon / Current Price. ^^ Reset at 1.80% over 1Y Government Bond but expressed as a margin over swap.
^ Yield to Maturity calculated using forward swap rates, margin is over the current 1Y swap rate. **Margin expressed to 2017 i.e. 10yrs from issue date (211bp if expressed as a margin to perpetuity)
^RBOHA & RCSHA & BISHA & BNSPA & QHLHA & CASHA valued as a perpetual. ^^ Expressed as a yield to reset 2013.
Disclosure: The comments in this publication are for general information purposes only. This publication is not intended to constitute investment advice under the Securities Markets Act 1988. If you wish to receive specific investment
advice, please contact your Investment Advisor. Forsyth Barr Limited and its related companies (and their respective officers, agents and employees) may own or have an interest in securities or other products referred to in this
publication, and may be directors or officers of, or provide investment banking services to, the issuer of those securities or products, and may receive fees for acting in any such capacity in relation to that issuer. Further, they may buy
or sell securities as principal or agent, and as such may undertake transactions that are not consistent with any recommendations contained in this publication. Forsyth Barr Limited and its related companies (and their respective
officers, agents and employees) confirms no inducement has been accepted from the researched/recommended entity, whether pecuniary or otherwise, in connection with making any recommendation contained in this publication
or on our website. Analyst Disclosure Statement: In preparing this publication the analyst(s) may or may not have a threshold interest in the securities mentioned in this publication. A threshold interest is defined as being a holder
of more than $50,000 or 1% of the securities on issue, whichever is the lesser. In preparing this publication non-financial assistance may have been provided by the entity being researched. A disclosure statement is available on
request and is free of charge. Disclaimer: This publication has been prepared in good faith based on information obtained from sources believed to be reliable and accurate. However, that information has not been independently
verified or investigated by Forsyth Barr Limited. Accordingly, Forsyth Barr Limited: (a) does not make any representation or warranty (express or implied) that the information is accurate, complete or current; and (b) excludes and
disclaims (to the maximum extent permitted by law) any liability for any loss which may be incurred by any person as a result of that information being inaccurate or incomplete in any way or for any reason. The information, analyses
and recommendations contained in this publication are confidential to the intended recipients and are statements of opinion only. They have been prepared for general information purposes and whilst every care has been taken
in their preparation, no warranty or representation is given (express or implied) as to their accuracy or completeness. Nothing in this publication should be construed as a solicitation to buy or sell any security or other product, or
to engage in or refrain from doing so or engaging in any other transaction. This publication should not be used as a substitute for specific advice. This publication is intended to provide general securities advice only, and has been
prepared without taking account of your objectives, financial situation or needs, and therefore prior to acting on any information, analysis or recommendation contained
in this publication, you should seek advice from your usual Investment Advisor. Forsyth Barr Limited and its related companies (and their respective officers, agents
and employees) will not be liable for any loss whatsoever suffered by any person relying upon any such information, analysis or recommendation. This publication
is not intended to be distributed or made available to any person in any jurisdiction where doing so would constitute a breach of any applicable laws or regulations.