Challenger’s hybrid issue stacks up

With a shorter time frame and more attractive pricing than other offers, the note will be popular.

Just when you thought you could take a breather, another hybrid issue has been announced. This time, however, it’s not a big four bank but Challenger Limited (CGF) and the terms of the capital notes issue look more encouraging – especially when compared to the recent CBA PERLS VII issue – as they offer better value.

The notes are likely to be issued on a gross yield of 6.04% and gross yield to maturity (YTM) of around 6.32% – while the current gross dividend yield of Challenger’s ordinary shares is only 3.58%.


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