ASX listed notes

ASX-Listed Floating Rate Notes: Weekly Overview & Market Commentary

This week’s snapshot of ASX-listed floating rate notes (FRNs) highlights modest price movements and stable income profiles across three key securities. The segment remains attractive for investors seeking income resilience in a rising or volatile interest rate environment, as FRNs typically adjust coupon payments in line with benchmark rates.

Centuria Capital (C2FHA) closed at $102.48, delivering a running yield of 7.55%, despite a weekly decline of –3.57%. Its issue margin of 4.25% continues to position it as one of the higher-yielding notes in the market, though the trading margin slipped to –0.88%, signaling some compression in secondary pricing.

Australian Unity’s Series D (AYUHD) ended the week at $99.30, offering a running yield of 5.61%. The note’s issue margin is 2.15%, while the trading margin improved to 1.55%, suggesting relatively stronger demand compared to last week, even as the price eased by –0.96%.

Meanwhile, Australian Unity Series E (AYUHE), with a longer maturity to December 2028, closed at $100.99 and provides a running yield of 5.85%. Its issue margin of 2.50% and trading margin of 1.65% indicate steady investor appetite for longer-dated FRNs, despite a weekly dip of –0.62%.

Key Takeaways for Investors

• Income stability: Running yields remain competitive, particularly for Centuria Capital at 7.55%, appealing to yield-focused portfolios.
• Margin dynamics: Trading margins for Australian Unity notes suggest relative strength in demand, while Centuria’s negative margin reflects pricing adjustments.
• Duration considerations: Longer-dated FRNs like AYUHE offer slightly higher yields, balancing income with extended exposure to credit and interest rate cycles.