At Pacific Private Asset Management, we collaborate closely with Fixed Income Solutions Pty Ltd to deliver timely credit market insights. This update highlights opportunities arising from Trump’s tariff announcements, project progress on key developments, and current fixed income market conditions.
Trump Tariff Opportunities: Volatility Breeds Value
“Never waste a good crisis.” Following Trump’s tariff announcements, significant volatility has re-emerged—particularly in commodities and related credit markets—offering value opportunities for discerning investors.
1. FX Opportunity – Repatriating USD Bonds
Due to the collapse in the Australian dollar, investors have a window to repatriate USD bonds back to AUD, generating attractive profits based purely on FX movements—even in the absence of major changes to credit spreads.
2. Commodity Sector Pressure
Credit spreads have widened across the board, but mining, oil, and gas bonds have felt the brunt of commodity price declines:
- Karoon Energy Secured Notes: Prices have dropped to near par amid falling oil and gas prices. However, Karoon’s Bauna and Who Dat assets remain strong cash-flow generators. We see strong value near par pricing.
- Coronado Global Resources: Recently downgraded to B by Fitch. The company may require capital raising or asset sales. This represents a high-risk, special situations opportunity, still under close monitoring.
- Mineral Resources: Bonds are weakening due to underlying stress. Potential equity raisings or asset sales could follow. Like Coronado, this is not yet attractive on a risk-adjusted basis but is one to watch.
3. Conservative Opportunities
- Australian bank subordinated debt: Yields have improved, with margins approaching 2.00%.
- High-quality corporate bonds: Widening spreads are beginning to offer attractive re-entry points.
Remara Croydon Project Update
The townhouse development at 19–23 Anzac Street, Croydon VIC remains on track for July 2025 completion. Major works are completed, no unforeseen construction variations have been reported, and the builder has secured a new agent with stronger local connections. The project is currently on time and on budget.
APMF SPV Portfolio Update
The APMF Pooled Bond Fund No.1 (APMF SPV) remains fully performing as of 31 March 2025. Portfolio diversification is strong, with the largest loan at just 14.1% of the total pool—well below the 25% maximum. A key credit strength is the 25.0% first-loss Class B Note, ensuring alignment of interest and a cushion for Class A Note investors.
Upcoming Gold Coast Event – Corporate Bonds Seminar
📍 Runaway Bay Junior Leagues Club, 225 Morala Ave, Runaway Bay, QLD
📅 Tuesday, 15 April
🕙 Arrive by 10:00 AM, presentation starts at 10:15 AM
Join Jake Koundakijian, CFA, and John Siganto to learn:
- The basics of fixed income
- How to access the bond market through FIS
- How to build a diversified portfolio starting from $50,000
RSVP via email: [email protected]
Term Deposit & Money Market Update
FIS continues to offer market-leading TD and NCD rates via institutional channels. Sample indicative rates (as of now):
| Term | Rate (Min $250k) |
|---|---|
| 3m | 4.85% |
| 6m | 4.85% |
| 9m | 4.75% |
| 12m | 4.65% |
| 36m | 4.05% |
| 60m | 4.50% |
📞 Contact: 02 8222 8904 or email [email protected]
Economic Update
- Australia: Dwelling prices rose 0.4% in March, following a 0.3% rise in February, aided by a recent RBA rate cut. Approvals surged 26% YoY.
- US Tariffs: On April 2, President Trump launched new reciprocal tariffs, escalating tensions. The EU and China are preparing countermeasures, with warnings of risks to global economic stability.
Meet the Fixed Income Research Team
Bradley Newcombe – Over 25 years of experience across Westpac Treasury, FIIG, and Millinium Capital. Bachelor of Accountancy and Master of Commerce (QUT).
William Arnold – Over 20 years of fixed income experience. Past roles include FIIG Securities, NabCapital, and QTC. Holds a BBus (UQ), MBA (London Business School), and CFA Level 1.