New Bond Issue Market Looking Very Upbeat

Friday 25th September 2020

Dear Sharechat readers

It would appear the new bond issues market is again well underway, with a number of bond issues hitting the market in August and September. We at Equity Investment Advisers Limited are anticipating more of these new issues over the next few months. Unfortunately the coupon rates will likely be trending downward especially, after the election when we expect general interest rates to continue to trend downward.

It is interesting that the recent Wellington Airport bonds (WIA070) rated BB that were issued at a coupon rate of 2.5% traded today at 1.98% and some supply is on offer at 1.98% and 1.95% on the exchange today.

The recent Summerset bonds (SUM020 unrated) issued last week at a coupon rate of 2.30% have traded as low 2.10% and is today on offer at 2.12% and 1.90%.

The new Auckland Council Bonds (AKC130 AA rated) issued at a coupon rate 2.95% will likely trend down sharply down upon listing and could be as low as 2% or less over the next 6 to 9 months.

So we anticipate more corporates coming to the market with bonds to capitalise on the sliding interest rates.

Should you be looking to buy bonds from new bond issues over the next few months, please contact Tony or Jason at Equity Investment Advisers Limited and we are likely to be able to assist you secure supply.

If you wish to discuss listed bonds, please call Tony on 09 304 0229 or email tony@equity.co.nz or jason@equity.co.nz

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