| AAI Limited |
Tracker status Updated on 30 July 2020
Australian general insurers are unlikely to see a significant increase in claims as a result of COVID-19. The majority of their operations are centred on property and casualty insurance. Households are likely to look at options around reducing non-essential insurance------this is more likely to impact health insurers. Investment income, which is generated to support claims, is likely to come under some pressure, although insurance income should be stronger this half. Capital is a strength for the sector.
Factsheets AUD BBSW+3.20% - October 2042 - Unsecured subordinated - Tier 2 Notes
AUD BBSW+3.30% - November 2040 - Unsecured subordinated -Tier 2 Notes |
| AMP |
Tracker status Updated on 30 July 2020
On 1 July 2020, AMP announced that it had completed the sale of its life insurance operations, AMP Life, to Resolution Life, after the market closes on 30 June 2020. Following the sale of its life insurance operations, the remaining operations consist of domestic and international asset management, domestic wealth management, and domestic banking activities.
On 13 July 2020, S&P Global Ratings (S&P) lowered the ratings on AMP Limited to the nonoperating holding company of AMP and the issuer of the AUD250m BBSW+2.75% Nov 2023c notes, to ‘BBB’. The ratings on the notes were also lowered by a notch to ‘BB+’. It is worth remembering, for the most part, that a lower rating on continuing operations (and associated debt) is not a reflection of a deterioration in its underlying credit quality, but rather a loss of implicit support from a higher-rated business, being AMP Life. AMP Life was the highest rated business within the group, yet its return on a capital-adjusted basis is the lowest--both of which are a function of its capital-intensive business model (hence the decision to sell the business).
Recall too that following the sale of AMP Life, the key risk facing the notes--that is, the risk that they are required to absorb losses at some point in the future--will primarily be a reflection of AMP’s banking operations, whose underlying credit quality will be largely unaffected by the sale. S&P affirmed the rating on AMP Bank at ‘BBB+’.
Factsheets
AUD
BBSW+2.75% - 15 November 2028 - Subordinated Tier 2 Notes
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| ANZ Bank |
Tracker status Updated on 30 July 2020
The underlying performance for the major banks was solid for the first six months of fiscal 2020 (1H20). Operating income was broadly stable half-on-half as largely flat net interest margins were met with soft, yet still positive, volume growth. Performance will soften in the near-term as mortgage and other loan deferrals take effect, although government support to date appears to be filling the gap left by a loss of income. Provisions (collective for the most part) increased sharply. The major banks provided base case and downside economic scenarios (year-end estimates for unemployment, output and house prices) and the impact of those scenarios and estimates on their respective regulatory capital ratios (a measure of their solvency). On this basis, we believe the major banks would have sufficient levels of capital to absorb a further increase in provisions as envisaged in modelled downside scenarios.
Factsheets
AUD BBSW+2.70% - 17 May 2026 - Subordinated Tier 2 Notes
AUD
BBSW+1.93% - 25 June 2024 - Subordinated Tier 2 Notes
AUD
BBSW+0.77% - 18 January 2023 - Senior Unsecured Notes
AUD BBSW+2.00% - July 2029 - Unsecured Subordinated Tier 2 Notes
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| Armour Energy |
Tracker status Updated on 30 July 2020
Armour is highly exposed to domestic gas spot prices which have fallen significantly as a
result of oversupply in the domestic market. While Armour recently released an update noting
it had reduced staffing costs and will defer capex spend where possible, the company has
limited ability to absorb additional costs or lower earnings over a prolonged period.
On 19 June 2020, Armour announced it had secured over AUD8m of committed subscription
funds from its previously announced equity raise. The announcement came a day after
Armour announced it had entered into a sale agreement with APLNG for its stake in the
Murrungama asset. Consistent with the terms of the notes, part of the sale proceeds will be
used to prepay some of the notes.
Factsheets
AUD 8.75% - 29 March 2024 - Senior Secured |
| Aroundtown |
Tracker status Updated on 30 July 2020
Liquidity remains adequate with EUR2.1bn in cash on its balance sheet. Aroundtown's portfolio is diversified by asset type and tenant, with a low dependency on single markets. Additionally, its recent acquisition of TLG should provide additional resiliency to its EUR23bn real estate portfolio.
Factsheets
AUD
4.50% - 14 May 2025 - Senior Unsecured
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| AT&T |
Tracker status Updated on 30 July 2020
Liquidity remains sound with USD9.9bn in cash and USD15bn available under its credit revolving facility (remains undrawn). Additionally, AT&T negotiated an USD5.5bn loan agreement (providing further liquidity). While the Company has withdrawn FY20 guidance, its Communication segment (+75% of revenue and +50% of EBITDA) remains relatively resilient. Expect lower new handset upgrades and softer revenues from its WarnerMedia segment (movie and television shut down and reduced advertisement revenue).
Factsheets
AUD
4.60% - 19 September 2028 - Senior Unsecured Notes
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