Wholesale Corporate Bond Portfolios

Leigh Winton - Head of Portfolio Strategy Created by Leigh Winton, Head of Portfolio Strategy

 
  • High Yield

    5.87%p.a. Return*

  • Investment Grade

    4.30%p.a. Return*

This portfolio has an allocation to high yield corporate bonds as well as those in foreign currencies. It is designed for wholesale investors seeking a higher return and who are comfortable with a corresponding increase in credit risk. It is based on a $1 million investment. $250,000 is the minimum amount that can be invested with FIIG.

Projected first five year coupon income

Security types

Sectors

What makes up the portfolio

Holding Security Description Product Type Structure Industry Sector Cost Value (Gross) Cost price Currency % allocation Purchase Yield
100,000 NCIG-12.5%-31Mar27c - USD FCB Senior Debt Resources 129.50 129.50 USD 15.6% 7.96%
100,000 Resi 2014-1x B1 FRN MBS RMBS $94,565 100.60 AUD 8.7% 4.29%
70,000 SYDAIR-ILB-3.12%-20Nov30 CIB Senior Debt Infrastructure $93,274 133.25 AUD 8.5% 5.38%
80,000 RWH-IAB-0%-30Jun33 IAB Senior Debt Infrastructure $77,737 97.17 AUD 7.1% 5.01%
80,000 PJS-IAB-0%-15Jun30 IAB Senior Debt Infrastructure $72,081 90.10 AUD 6.6% 5.14%
80,000 JEM NSW Schools IAB-0%-28Feb31 IAB Senior Debt Infrastructure $70,942 88.68 AUD 6.5% 4.93%
70,000 DBCT(DALRYMPLE)-FRN+30bps-09Jun21 FRN Senior Debt Infrastructure $66,710 95.30 AUD 6.1% 3.86%
50,000 Sungrp-BBSW+2.05%-16Dec24 FRN Senior Debt Infrastructure $51,969 103.94 AUD 4.8% 3.95%
50,000 HBS 2017-1 C FRN MBS RMBS $51,000 102.00 AUD 4.7% 5.27%
40,000 Asciano-5.40%-12May27 FCB Senior Debt Infrastructure $42,220 108.05 AUD 4.0% 4.35%
40,000 FRONTIER-9.25%-01Jul21-USD FCB Senior Debt Telecom $43,224 82.00 USD 3.9% 15.99%
40,000 GENW-BBSW+3.50%-03Jul20c FRN Lower Tier 2 Property $41,741 104.35 AUD 3.9% 3.71%
40,000 LibertyFin-5.10%-01Jun20 FCB Senior Debt Other Financials $41,120 102.80 AUD 3.8% 3.93%
20,000 NOBLE-7.75%-15Jan24-USD FCB Senior Debt Energy $23,259 88.25 USD 2.1% 10.38%
20,000 AAI-BBSW+3.20%-6Oct22c FRN Lower Tier 2 Insurance $21,647 108.24 AUD 2.0% 3.69%
20,000 LUCAS-8.00%-29Sep22 FCB Senior Debt Other Corporate $20,740 103.70 AUD 1.9% 6.81%
20,000 Merredin-7.50%-15Nov22 FCB Senior Debt Energy $20,280 101.40 AUD 1.9% 7.16%
10,000 Vale-6.25%-10Aug26-USD FCB Senior Debt Resources $15,392 116.80 USD 1.4% 3.95%
10,000 HERTZ-7.625%-01Jun22-USD FCB Senior Debt Other Corporate $13,791 104.65 USD 1.3% 6.42%
10,000 AVON-7.875%-15Aug22-USD FCB Senior Debt Other Corporate $13,478 102.28 USD 1.2% 7.29%
10,000 JCP-5.875%-01Jul23-USD FCB Senior Debt Other Corporate $12,463 94.58 USD 1.1% 7.06%
10,000 Axsess-BBSW+6.50%-9Oct20c FRN SubDebt Other Financials $10,310 103.10 AUD 1.0% 7.29%

^ Pricing as at 16 November 2017. Subject to change.

How did we choose this portfolio?

Each bond is selected to ensure the overall portfolio:

Preservation

Is designed to preserve
your capital

Cash flow

Generates ongoing
cash flow

Diversity and balance

Provides diversity
and balance

We combine fixed, floating and inflation linked securities and ensure all the bonds in the portfolio are investment grade securities.

  • Fixed Rate Bonds pay the same coupon amount throughout the life of the bonds, allowing you to predict cash flow.
  • Floating Rate Bonds move with the market interest rate and increase your return when rates rise.
  • Inflation Linked Bonds allow you to protect against rising inflation.

High senior debt allocation means your interest and principal is prioritised above shareholders for repayment. This protects your capital and income in the event of a problem with one of the invested companies: legally, if the company goes into liquidation any available funds will be repaid to senior investors first. 

This portfolio has been constructed with Investment Grade and AUD corporate bonds. It is designed for wholesale investors wanting a conservative approach to investing. It is based on a $1 million investment. $250,000 is the minimum amount that can be invested with FIIG.

Projected first five year coupon income

Security types

Sectors

What makes up the portfolio

Holding Issuer Product Type Structure Industry Sector Cost Value (Gross) Cost Price % allocation Purchase Yield
90,000 SYDAIR-ILB-3.12%-20Nov30 CIB Senior Debt Infrastructure $119,923 133.25 11.1% 5.38%
100,000 Resi 2014-1x B1 FRN MBS RMBS $94,565 100.60 8.8% 4.29%
80,000 Asciano-5.40%-12May27 FCB Senior Debt Infrastructure $86,536 108.05 8.0% 4.35%
80,000 LibertyFin-5.10%-01Jun20 FCB Senior Debt Other Financials $84,158 102.80 7.7% 3.93%
80,000 PJS-IAB-0%-15Jun30 IAB Senior Debt Infrastructure $72,081 90.10 6.7% 5.14%
70,000 JEM NSW Schools IAB-0%-28Nov35 IAB Senior Debt Infrastructure $70,041 100.06 6.4% 5.13%
70,000 RWH-IAB-0%-30Jun33 IAB Senior Debt Infrastructure $68,020 97.17 6.2% 5.01%
70,000 DBCT(DALRYMPLE)-FRN+30bps-09Jun21 FRN Senior Debt Infrastructure $66,983 95.30 6.2% 3.86%
50,000 AAI-BBSW+3.20%-6Oct22c FRN Lower Tier 2 Insurance $54,420 108.24 5.0% 3.69%
50,000 Sungrp-BBSW+2.05%-16Dec24 FRN Senior Debt Infrastructure $51,295 103.94 4.8% 3.95%
50,000 AURIZON-4.0%-21Jun24 FCB Senior Debt Infrastructure $52,631 103.60 4.8% 3.39%
50,000 HBS 2017-1 C FRN MBS RMBS $51,000 102.00 4.7% 5.27%
40,000 DBNGP-6%-11Oct19 FCB Senior Debt Infrastructure $42,054 104.48 3.9% 3.53%
30,000 NAB-BBSW+2.40%-21Sep21c FRN Lower Tier 2 Major Bank $31,681 104.93 2.9% 3.24%
30,000 GENW-BBSW+3.50%-03Jul20c FRN Lower Tier 2 Property $31,511 104.35 2.9% 3.71%
20,000 LENDLEASE-6%-13May20 FCB Senior Debt Property $21,381 106.79 2.0% 3.13%
20,000 AAI-BBSW+3.30%-18Nov20c FRN Lower Tier 2 Insurance $21,149 105.75 2.0% 3.29%
20,000 ANZ-BBSW+2.70%-17May21c FRN Lower Tier 2 Major Bank

$21,103

105.48 2.0% 3.16%
20,000 BENAU-BBSW+2.80%-9Dec21c FRN Lower Tier 2 Regional Bank $21,218 105.22 2.0% 3.67%
20,000 HYUCAP-3.50%-30Mar22 FCB Senior Debt Other Corporate $20,228 101.14 1.9% 3.22%

^ Pricing as at 3 October 2017. Subject to change.

How did we choose this portfolio?

Each bond is selected to ensure the overall portfolio:

Preservation

Is designed to preserve
your capital

Cash flow

Generates ongoing
cash flow

Diversity and balance

Provides diversity
and balance

We combine fixed, floating and inflation linked securities and ensure all the bonds in the portfolio are investment grade securities.

  • Fixed Rate Bonds pay the same coupon amount throughout the life of the bonds, allowing you to predict cash flow.
  • Floating Rate Bonds move with the market interest rate and increase your return when rates rise.
  • Inflation Linked Bonds allow you to protect against rising inflation.

High senior debt allocation means your interest and principal is prioritised above shareholders for repayment.  This protects your capital and income in the event of a problem with one of the invested companies: legally, if the company goes into liquidation any available funds will be repaid to senior investors first. 

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* Return is yield to maturity. Subject to change and before fees. Please see our FSG for any applicable fees.
† Weighted average life for maturity.
^ Based on currency exchange rate as at 03/10/17. Bond will be held in foreign currency.

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An investment in notes or corporate bonds should not be compared to a bank deposit. Notes and corporate bonds have a greater risk of loss of some or all of an investor’s capital when compared to bank deposits. Past performance of any product described on any communication from FIIG is not a reliable indication of future performance. Forecasts contained in this document are predictive in character and based on assumptions such as a 2.5% p.a. assumed rate of inflation, foreign exchange rates or forward interest rate curves generally available at the time and no reliance should be placed on the accuracy of any forecast information. The actual results may differ substantially from the forecasts and are subject to change without further notice. FIIG is not licensed to provide foreign exchange hedging or deal in foreign exchange contracts services. The information in this document is strictly confidential. If you are not the intended recipient of the information contained in this document, you may not disclose or use the information in any way. No liability is accepted for any unauthorised use of the information contained in this document. FIIG is the owner of the copyright material in this document unless otherwise specified.

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