New issue alert - Virgin Australia

As Sprint & T-Mobile take their case to Congress, it remains unknown if the merger will be approved. For existing bond holders, current pricing presents an attractive exit level, or an opportunity to await the outcome with further upside.

Virgin Australia’s strong 1H19 results make the three bonds issued by the company compelling investment options in high yield.

Labor’s proposed changes to imputation credit will impact total income derived from hybrids. Investing in a portfolio of bonds, with unfranked cash distributions will protect against this loss of income.

We change our recommendation on Virgin Australia’s 8.50% USD notes due 2019 and reiterate our recommendations on the company’s 7.875% USD notes due 2021 and 8.25% AUD notes due 2023 following the release of the 1H19 results.

General Motors Financial Company has announced an inaugural 4 year AUD transaction.

Sydney Airport – Updated recommendation

Merredin Energy – Downgraded recommendation.

A new USD HY bond has been added to the DirectBond list, issued by Mercer International and maturing in 2025, it yields north of 6.00%pa. The company is a leading global market position in Northern Bleached Softwood Kraft pulp, with a diversified product range and geographical locations. We think Mercer is a good high yield income supplement in a diversified portfolio.

Mercer International Inc. (Mercer, Company) was founded in 1968 and is headquartered in Vancouver, Canada. Mercer, together with its subsidiaries, manufactures and sells northern bleached softwood Kraft (NBSK) pulp in the United States, Europe, Asia, and internationally.

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

PMP Ltd (PMP, Group) is the largest integrated print and distribution company in Australia and New Zealand, producing catalogues, magazines, newspapers and books. The company has been listed on the ASX since 1991. PMP Print’s production plants are located strategically in major cities. The company offers letterbox distribution of catalogues and newspapers direct to households through its PMP Distribution business and magazine distribution directly to retail outlets through its Gordon & Gotch business. In March 2017 PMP merged with IPMG and now effectively operates in a duopoly with competitor the IVE Group. With the merger of IPMG, PMP now has a range of marketing services, which include: creative design, brand strategy, business consulting services, marketing automation, photography, videography, point-of-sale, public relations, content and social media.

Next Generation Clubs (Next Gen, or the Company) owns and operates six health clubs across Australia and in New Zealand. It has approximately 28,000 members. The clubs differentiate themselves as a higher end multi service offering with facilities including tennis and squash courts, indoor and outdoor pools, spas, saunas, café and lounge, function rooms and full service gyms.

Mallinckrodt International Finance SA and Mallinckrodt CB LLC, a direct wholly owned subsidiary are together the issuers of the notes. The issuers are wholly owned subsidiaries of Mallinckrodt Plc (Mallinckrodt, Company), a public limited company incorporated in Ireland.

Mallinckrodt International Finance SA and Mallinckrodt CB LLC, a direct wholly owned subsidiary are together the issuers of the notes. The issuers are wholly owned subsidiaries of Mallinckrodt Plc (Mallinckrodt, Company), a public limited company incorporated in Ireland.

Mallinckrodt International Finance SA and Mallinckrodt CB LLC, a direct wholly owned subsidiary are together the issuers of the notes. The issuers are wholly owned subsidiaries of Mallinckrodt Plc (Mallinckrodt, Company), a public limited company incorporated in Ireland.

JEM (Southbank) Pty Ltd (Southbank) is the financing vehicle for Axiom Education Queensland Pty Ltd (Axiom Qld). Axiom Qld was contracted by the State of Queensland to design, build and maintain facilities at the Southbank Institute of Technology in Brisbane.

Hertz Corporation is a subsidiary of Hertz Global Holdings, a multinational vehicle rental business, headquartered in Estero, Florida. It operates globally through the Hertz, Dollar and Thrifty brands from approximately 9,700 corporate and franchisee locations in North America, Europe, Latin America, Africa, Asia, Australia, The Caribbean, the Middle East and New Zealand.

Hertz Corporation is a subsidiary of Hertz Global Holdings, a multinational vehicle rental business, headquartered in Estero, Florida. It operates globally through the Hertz, Dollar and Thrifty brands from approximately 9,700 corporate and franchisee locations in North America, Europe, Latin America, Africa, Asia, Australia, The Caribbean, the Middle East and New Zealand.

RWH Finance Pty Ltd (RWH) is the financing vehicle for RW Health Partnership Pty Ltd (RWHP), which contracted with the Victorian State government (State) to design, construct, operate and maintain various facilities at the Royal Women’s Hospital, in Melbourne under a Public Private Partnership (PPP) arrangement.