insto - Australian financial markets

The time is right for convertible bonds to be re-introduced as a viable corporate financing option. This year alone, offshore issuance of convertible bonds has topped $US80 billion, according to Thomson Reuters’ latest report. In Australia, until very recently, that figure was closer to zero.

The ASX-listed Aquarius Platinum (AQP), also listed on the London and Johannesburg Stock Exchanges, completed the placement of US$250 million of unsubordinated, unsecured convertible bonds, due 2015, during the week ended 27 November 2009.

The bonds will be issued at 100 per cent of their principal amount with a coupon of 4.00 per cent per annum, payable semi-annually in arrears. The initial conversion price is US$6.773 per share, representing a premium of 22.5 per cent to the volume weighted average price of the Company’s common shares on the London Stock Exchange between launch and pricing, translated at a GBP-USD exchange rate of 1.653.

Insto editor Bernard Kellerman spoke to Paulo Maia, HSBC Australia's new CEO about his bank’s performance and, as an ex-debt capital markets expert, his views on where the domestic deals are heading.

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The US bond markets have thawed so much in recent times that Australian and UK issuers prepared to deal with currency risks are also finding a warm welcome.

US stock markets strengthened at the close despite poor retail and jobs data dampening strong numbers from Walmart.

The co-ordinated response to the banking crisis appears to have benefitted the owners of the world’s largest banks in no uncertain terms. The results from the US banks in the last few days have emphatically confirmed that, with first Goldman Sachs and then JP Morgan delivering their best results ever, backed by a better than expected efforts from Bank of America (with Merrill Lynch yet to be fully digested) and Citigroup.

The week was all about earnings - US second quarter corporate earnings. The direction of credit markets were in limbo following weak US employment statistics earlier in the month. The health of America's top companies and particular its largest banks was seen as the next means to assess the state of the global economic recovery.

US stocks made further gains on Wednesday, taking their lead from stronger than expected earnings and improved credit card loan numbers.

US stocks gained further ground overnight after Goldman Sachs reported strong second quarter profits.

The S&P500 stock index climbed 0.53 per cent to 905.83.

US stocks made a strong start to the week as bank and industrial shares rallied ahead of Tuesdays key earnings releases.

The S&P500 traded up 2.49 per cent to close above the 900 point mark and ahead its 200 day moving average.