Pacific Private Asset Management is pleased to share the latest credit market developments and investment insights from our trusted partner, Fixed Income Solutions Pty Ltd. This update highlights key corporate bond issuances, trading updates, and macroeconomic developments shaping credit opportunities.
🔔 Aurizon Subordinated Notes Issuance
Aurizon Holdings Ltd has priced a $500 million subordinated note issuance split evenly between floating rate (3m BBSW + 280bps) and fixed-to-floating rate (6.30%) securities. The notes are rated Baa2/BBB- and include a 5.25-year call.
Aurizon, Australia’s largest rail freight business, reported operational challenges due to weather events and rising bad debts. Despite this, the company is undertaking a cost-saving initiative expected to yield $50 million annually starting FY26. These developments are mildly credit negative, though proactive steps reflect prudent management.
📌 Avanti Finance: Upcoming Refinance & Performance Update
Avanti is preparing to refinance $70 million of floating rate notes maturing in June 2025. While final deal terms are pending, past issues suggest attractive return potential.
The company reported a small statutory loss of NZ$2.8 million for H1 FY25, primarily due to hedge accounting adjustments. Underlying cash earnings declined but remain positive. With a strong capital position and reaffirmed BB credit rating by S&P, no material credit concerns are noted.
✅ MyState Subordinated Debt Offering
MyState successfully raised $100 million via a subordinated note offering, priced at 3m BBSW + 275bps. The 10-year non-call 5 structure is expected to be rated BBB-.
The yield appears attractive relative to its investment-grade credit profile, and Fixed Income Solutions remains comfortable with MyState’s risk-return outlook.
⚡ Ampol Restructures Energy Business
Ampol has announced the sale of its Australian and New Zealand retail energy divisions to AGL and Flick Energy, respectively. The move simplifies its Energy Solutions strategy and focuses future growth on EV charging and renewable fuels.
The transaction is modestly credit positive, adding $65 million in cash and removing underperforming operations—expected to boost EBITDA by ~$50 million annually.
💰 Term Deposit & Money Market Rates
Fixed Income Solutions continues to provide access to leading TD and NCD rates through its Short-Term Money Market (STMM) desk. Indicative rates for deposits over $250k are:
| Term | Rate |
|---|---|
| 3m | 4.67% |
| 6m | 4.68% |
| 9m | 4.50% |
| 12m | 4.30% |
| 36m | 3.85% |
| 60m | 4.15% |
🌏 Economic Outlook – April 2025
- Australia: Household spending remains subdued. March’s 0.3% nominal decline brings Q1 real growth close to zero.
- US: The Fed held rates steady while citing mixed growth data. Underlying domestic demand was robust, but Q1 GDP fell due to a drop in net exports. Risks of both inflation and unemployment are elevated.
- UK: The Bank of England cut rates by 25bps to 4.25%, citing easing inflation and economic slack. Views remain mixed, with forward guidance calling for a “gradual and careful” approach to future policy easing.
For more information on any of the opportunities mentioned, please reach out to your Pacific Private Asset Management representative.