Company Interview / Busy bond pipeline builds optimism

Key Points:

Corporate issuance ramps up, including Scentre Group (ASX:SCG) and Stockland (ASX:SGP) senior bonds WA green bond and Pacific Life AUD deal seen as signs of market sophistication Wider spreads on BB‑rated RMBS/ABS tranches from Angle Asset Finance and Metro viewed as attractive Rising oil price and inflation keep government bond yields elevated, but recent pullback noted

Jonathan Sheridan from FIIG Securities outlines a sharp pickup in bond issuance as calm returns to markets and optimism grows for a resolution in the Middle East. Sheridan notes that around 20 mandates line up, with heavy activity across corporates, governments and securitisation. Scentre Group (ASX:SCG) and Stockland (ASX:SGP) issue 5–7.5 year senior bonds at tight spreads of about 120–137 basis points, translating to yields near 5.85–6.12%, which Sheridan views as significantly more attractive than six weeks ago.

Sheridan highlights Western Australia’s 13.5‑year green bond as notable for a resource‑heavy state, suggesting it fills a specific duration gap and offers hedging benefits for sophisticated investors. He also points to Pacific Life’s inaugural Australian dollar AA‑ rated secured deal, describing the structure as unusual but a sign of growing market sophistication. New Hope Corporation (ASX:NHC) prices a $300 million convertible note, adding to the busy pipeline.

Securitisation remains a focus, with recent and upcoming residential mortgage‑backed and asset‑backed deals from Thinktank, Angle Asset Finance and Metro. Sheridan is particularly interested in BB‑rated tranches where spreads have widened from about 280 to over 310 basis points, viewing this as improved value for investors amid elevated government bond yields driven by oil‑related inflation pressures.