Macquarie’s hybrid needs more margin

The debt is sub-investment grade and has a credit margin of more than 5 per cent.

Summary: Macquarie Group is aiming to raise $400 million in a hybrid notes offer. Franking is expected to be 40 per cent due to Macquarie’s extensive international business activities. The notes have three optional call dates starting from March 2021.

Key take out: Macquarie is offering a credit margin of 515bps to 535bps but the notes are sub-investment grade, meaning the margin doesn’t seem to really compensate for the additional credit risk.

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