Suncorp CPS3: A toast to the hybrid market

Key Points Suncorp CPS3 is a replica of Suncorp CPS2 with a lower margin Higher Suncorp ordinary share price means greater risk Earlier hybrids more attractive in comparison Suncorp is back with a new hybrid: margin to maturity of just over 3% (reflecting CPS2’s shorter remaining ‘term’). What’s caused the margin to plummet? CPS3 is not a vastly superior proposition to CPS2. What's different is the current demand for anything paying a yield higher than term deposits. That’s what Suncorp is capitalising on here. When reviewing CPS2 we said that Suncorp ‘isn’t necessarily more exposed than the big four [to...

Suncorp is back with a new hybrid: margin to maturity of just over 3% (reflecting CPS2’s shorter remaining ‘term’).

What’s caused the margin to plummet? CPS3 is not a vastly superior proposition to CPS2. What's different is the current demand for anything paying a yield higher than term deposits. That’s what Suncorp is capitalising on here.

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