Is MM holding Bank Hybrids till the redemption date?

Hi Kevin,

A timely question as the clock slowly ticks. Importantly, this is only for bank hybrids, and does not include the insurers (SUNPI), or notes issued by Macquarie Group.

We hold;

• ANZPI with first call date in March 2028, paying a current yield of 6.37% based on $103.96 last price, or ~7.20% from our entry price. (i.e. the 6.37% yield takes into consideration the capital loss between $103.69 & $100 redemption)
• WBCPK with first call date in September 2028, paying a current yield of 6.40% based on $102.30 last price , or ~7.1% from our entry price
• NABPI with first call date in December 2029, paying a current yield of 6.21% based on $104.50 last price, or ~7.30% from our entry price

Our bias is to hold them until maturity, which is most likely to happen on their first call dates as outlined above. The yield for the low risk that is now embedded in these securities still stacks up in our view. Of course, transaction costs also come into this, and could be one reason why the broker is suggesting such a move.

We don’t have any issue with corporate bonds, and we do use these for the wholesale portfolios we manage, though it obviously depends on the issuer in question. We liked hybrids in part because they were issued by regulated entities, and for that reason, we also like tier 2 bank bonds which have a broadly similar sort of risk profile to Hybrids.  Buying corporate debt from unregulated entities should ultimately pay more for the lower level of external oversight – all else being equal.

In terms of what to move to, this will depend on whether or not we’ll talking about retail or wholesale portfolio’s. The Market Matters published portfolios are retail, so we’ll be moving to ASX listed retail funds. We have some of these already (PCI, DN1), while we also think there is value in DMNHA, MA2HA and others, which are trading below bar – though important to note, we would avoid the Metrics issued securities.

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Bank Hybrids – Source MST Financial

LAST UPDATED 04/09/2026 11:38

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Bank Hybrids – Source MST Financial

LAST UPDATED 04/09/2026 11:38