Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi James, I have just received the notice from Macquarie Bank, informing me of the launch of the new hybrid MCN5 (MQGPF). If I have not mistaken, the offered distribution rate is 2.5702 % and 40% franked. Under the present positive share activities, this seems hardly worth it. What do you think? Thanks and regards Greg
The new Macquarie hybrid is the smallest margin (2.9% over bank bills) I’ve seen from a Macquarie issue and it’s close to the lowest rate offered by CBA when they issued the CBAPD a few years ago at 2.7% over – that proved to be the top of the market (bottom in yields) for a few years. While MM is not saying this is the top of the market for hybrids, it is a very tight yield for a Macquarie note and highlights the demand for yield and the weight of money in the system.
The broader hybrid market is trading on similar rates to this new issue, the latest Westpac note (WBCPJ) is trading on a margin of 2.87% over bank bills based on its closing price of $104.45, and given the lower level of risk in WBC versus MQG, MM prefers the WBCPJ to the MQGPE.
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