Given the recent price action, and further yield compression due to the relative proximity of the next call date and current trading price well above the call price, we have downgraded our recommendation on Merredin Energy's 7.50% notes due 2022 (Notes). Our credit outlook on the Notes remains Stable.

Deloitte, the voluntary administrator of Axsesstoday, provided an update on the current sale process. Deloitte has advised that they have entered into an exclusivity arrangement with an affiliate of Cerberus Capital Management, L.P. (Cerberus) to finalise terms on which Cerberus proposes to acquire all of the assets of AXL by way of a deed of company arrangement.

The July 2019 update to our DirectBond List including new additions and our current Trading Restrictions list.

We provide an update to noteholders on the progression of ongoing discussions with Lucas following our credit update dated 24 May 2019. Our recommendation on Lucas’ notes due 2022 remains unchanged.

Auswide Bank Ltd. (ABA) is a small ASX-listed bank that provides retail banking services across Australia.

Fund managers have been rotating out of their equity allocations into cash and bonds, according to the BofA Merrill Lynch Global Fund Manager Survey results for June. This is largely due to a pessimistic outlook and is a timely reminder that portfolios should be well-diversified with an allocation to more defensive assets.

With bond yields continuing to move lower, investors are now adjusting to the new reality of risk adjusted returns.

Following the publication of our Credit Outlook on 29 January 2019, we are providing this summary of new and changed recommendations over the past five months, as well as the list of all our current recommendations as of the date of this update.

Following the announcement that Eric Insurance had finalised an agreement with ASIC in relation to its remediation program, we believe that the near term prospects for the Company have improved and no longer considered speculative. While we are of the view that Eric, and the insurance sector more generally are facing some headwinds, we believe the notes, at an indicative mid-price of AUD77.50, offer good relative value, with real prospects of capital appreciation over the near-to-medium term.

On 18 June 2019, Eric Insurance announced that it had agreed with ASIC the terms of the remediation program, with total remediation costs expected to reach AUD3.4m. The finalisation of the terms of remediation removes a significant uncertainty for Eric in our opinion. Pending discussions with the Company, we are placing our recommendation Under Review, noting the likelihood that the previous Speculative recommendation will be revised.

UK investment bank and financial services company, Barclays PLC, has launched an Australian dollar multi-tranche [5] year fixed coupon and floating rate note (FRN), and a [10] year fixed coupon note.

The newest additions to FIIG’s USD DirectBond list are two high yield (HY) opportunities issued by Peabody Energy Corporation. Since emerging from Chapter 11 in 2017, it issued a shorter dated 2022 and medium-term 2025 maturity bond. We prefer the 2025 bond offering an attractive yield over 6.00%pa.

We update our recommendations on a number of Tier 2 issuances by Australian banks and insurance companies.

In this report, we look at the Australian housing market and how recent events as well as announcements by the RBA and APRA may affect the sector over the near term.

We reiterate our recommendation on Next Gen's 7.90% notes due 2023, with a Stable credit outlook. The Group reported 1Q19 revenue of AUD9.6m and EBITDA of AUD2.5m, which were softer than 1Q18. Membership income from Perth South has led to lower forecasted EBITDA for FY2019, and leverage is forecasted to remain temporarily elevated. The Doncaster project is expected to be completed within the next 12 – 14 months, within management’s guidance

The Australian bond market is faced with an insatiable demand currently, as bonds are maturing or being called, dwindling new issuance is limiting additional supply and there’s a thirst for yield. The liquidity and depth of the large USD high yield (HY) bond market is where savvy investors are looking to for opportunities, and for good reason, as we further explore.