[VIDEO ANALYSIS] Are the recently released Suncorp Capital Notes worth a look?

Scott Schuberg

:

All right. Ian from Queensland has two questions. Firstly, what are your thoughts on the recently announced SunCorp Capital Notes?

 

Shannon Rivkin:

Yes. We're actually going to cover these, and I think that article got left out, so I'll make sure that gets in. But looking at these ones, and also looking at the ones we've already done, and the Westpoint one was the catalyst, actually, for the CBA recommendation. The CBA hybrids we did this week as well. You know, we're always trying to look at the portfolio and make sure we've got the best ones at least relative to risk. SunCorp very much like the big banks, probably not as low risk, but certainly in a really strong capital position, that business. Appropriately, you're seeing them come out with a yield very similar to what we're seeing with the recent ones. It's not bad, it's about 4.1% above the bank bill swap rate.

 

 

Sure. Not that bad. But, you know, what we always want to do is all the best ones, and right now we've got the NAB ones and the Westpac ones. We've just switched out the west bank ones into the CBA. If you've got room for only one, I would you encourage you to look at the CBA ones, they're yielding just a little bit more. Additionally, you know, you'd be buying these at about $106, so eventually you'd see some capital loss there which would be a nice tax position for you as well because it's a short-term holding, you can probably be more confident on the return over a shorter period of time, and that's actually a common element for the next ones as well.

 

Complex product warning

This article contains information about hybrid securities, which are considered complex financial products. Please click here to read the ASX's "Understanding Hybrid Securities" document before considering an investment in hybrid securities. 
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