Pacific Private Asset Management is pleased to share the latest credit research highlights from our partner Fixed Income Solutions Pty Ltd, featuring new trade ideas, recent SPV settlement news, and updated economic commentary.
💡 Trade Idea – Pacific National Subordinated Notes
Pacific National Holdings Pty Ltd (PNH) operates in rail freight logistics, deriving revenue from:
- Containerised freight (42%)
- Metallurgical coal (20%)
- Thermal coal (20%)
- Other segments (18%)
PNH bonds trade wider than similarly rated peers. This spread may be due to:
- Market concern of a potential downgrade (not guaranteed)
- ESG-related concerns due to coal haulage exposure, despite:
- PNH not being a direct coal user
- Only 20% of revenue sourced from thermal coal
PNH is actively working to preserve its investment grade rating. The subordinated notes offer compelling value:
- Credit Rating: BB (2 notches below PNH senior unsecured)
- Current Yield: Low- to mid-7% range (trading near par)
This relative value trade may appeal to income-seeking investors willing to manage the ESG overlay.
🔔 Mineral Resources Update
Mineral Resources has sold its Yilgarn region iron ore assets, which were already in care and maintenance since exports ceased in 2024. While the sale won’t materially improve the balance sheet, focus now shifts to:
- Upcoming quarterly production report
- August full-year financials
- Progress at the Onslow Iron operations
Fixed Income Solutions maintains a cautious view on MinRes debt, noting:
- Balance sheet initiatives are underway
- Little margin for error remains
- Current note pricing does not fully compensate for risk
✅ APMF SPV II – Successful Settlement
We’re pleased to confirm the settlement of the second SPV with Australia Pacific Mortgage Fund (APMF):
- Class A Notes Raised: $36M
- Total Facility Size: Nearly $50M (with equity tranche)
Given ongoing demand, a potential new tap of these notes is likely. Clients will be informed once confirmed.
💰 Term Deposit & Money Market Rates
Current indicative rates (min. $250k):
| Term | Rate |
|---|---|
| 3m | 4.40% |
| 6m | 4.47% |
| 9m | 4.25% |
| 12m | 4.20% |
| 36m | 3.95% |
| 60m | 4.25% |
📞 Call: 02 8222 8904 | ✉️ TD@fixedincomesolutions.com
📉 Economic Update – July 2025
Australia
- May CPI Indicator: Fell 0.4% MoM; annual inflation now 2.1% – at the bottom of RBA’s target range
- Trimmed Mean CPI: Down to 2.4% (from 2.8%)
- Key deflation drivers: housing, energy rebates, travel & accommodation
- RBA Outlook: Economists now expect a July rate cut (revised from August)
Offshore – United States
- Few new data releases, but FOMC Chair Powell addressed Congress:
- “Economy remains strong, so no rush to cut rates”
- Still open to cutting rates “sooner rather than later” if tariffs affect growth
For further insights or to discuss how these developments may align with your portfolio strategy, please contact your Pacific Private Asset Management representative.