Fixed income

 

 

Debt securities

Macquarie has been active in the primary and secondary debt markets since the mid-1980s when the Australian markets were formed in response to financial deregulation. Our achievements are based around our long association with investors and issuers from the government and private sector. We deliver products and services for debt issuers and investors.

We are active in Australian Government and semi-Government fixed income and inflation linked bond markets. Our issuance activity includes all types of debt, but we are particularly well known for our securitisation activities. Every deal we arrange and place is supported by strong research and secondary market pricing.

We can arrange, place, structure and provide secondary market pricing and research for debt securities relevant to the Australian and New Zealand capital markets. Additionally, we have expanding capabilities in offshore markets that complement our Australian activities.

The consistency of our results reflects a long term commitment to working with our clients in all market conditions across a range of high quality debt market products.

Government bonds Fixed income debt securities issued by the Australian and New Zealand government sector.
Non-govt,corporate and global bonds/MTNs Fixed income debt issued by domestic or foreign private sector issuers or foreign governments and agencies.
Debt/Equity hybrids
Convertibles
Securities that have elements of both equity and debt. Convertible bonds and preference shares are the most commonly used examples.
Floating Rate Notes Longer-term securities with a floating rate coupon.
Asset swapped securities Combination of a debt security and a currency and/or interest rate swap.
Credit Linked Notes A synthetic, credit linked exposure structured into a security.
Asset backed
securities: mortgages, auto/equipment leases, projects and receivables
Secured by specific assets or cashflows and known as securitisations. Are sometimes grouped with the general classification 'Structured Finance'. Issued into the capital markets via a special purpose vehicle or trust. Senior tranches rated AAA, with lower rated, higher yielding subordinated pieces.
Private placements Tradeable debt securities issued via a private placement to investors from issuers. Issuers will respond to enquiries from investors.
Index Replication Securities Debt securities with the performance of indices chosen by you built into them. Structured to help you benchmark risk management, normally at a positive spread to the reference index. Structured to deliver zero tracking error and to outperform the replicated index. Tailor made replications are possible.
Short-term notes, CP, asset backed CP, ECP Short-term paper (30, 60, 90 and 180 days) for liquidity management. Issued at a discount. Euro-CP issued out of Hong Kong and London for offshore investors.
Inflation linked bonds Longer-term securities to deliver a certain return against inflation; maintain the real value of assets. Capital indexed or indexed annuities. Government or non-government issuers.

 

Credit

Macquarie structures and trades in both physical debt instruments and synthetic instruments including credit derivatives and Total Return Swaps. Using these instruments Macquarie can create tailored credit solutions for both credit investing and hedging clients.

Macquarie also specialises in emerging markets credit, Asian markets credit and US credit.

Interest rate hedging

Macquarie works with clients to help them structure and manage their interest rate exposures. Our range of products and services suit both asset and liability managers from standard or vanilla securities, to tailor-made offerings to suit more complex exposure management issues, generally at a total portfolio, or whole of project, level of risk.

We hedge current, future and potential interest rate exposures for our clients. We design and transact in risk management products by understanding our clients’ risks, their risk appetite and what we need to do to achieve the right solutions.

Applications of interest rate structuring

CORPORATE DEBT RE-FINANCING We help analyse existing debt and interest rate derivative positions when a refinancing or restructuring is contemplated. We quantify your interest rate exposure and compare and contrast it to where you would like to have those parameters - "a before and after snapshot". Through appropriate structuring, we transform the old to the new using a combination of interest rate and, if necessary, debt arrangement and placement.
PROJECT FINANCE RISK MANAGEMENT We help bidding syndicates to quantify exposures to interest rates in potential and successful project finance transactions. Our structuring capabilities control and manage risk appropriately during both the pre- and post bid periods. These structures control real and nominal interest rate and credit risks, provide for construction flexibility and minimise adverse tax impacts.
PROTECTION FOR PROPERTY CONSTRUCTION We can protect property developers from increasing interest rates. These structures range from the simple vanilla structures to more exotic options, which can be structured in ways to reduce costs of hedging.
STRUCTURED FINANCE TRANSACTIONS We combine structured finance expertise with an array of risk transformation products. They allow you to maximise the benefit of your financial arrangements by giving you the flexibility to hedge unwanted market risk exposures, which lets you design the underlying structure how you need to.
ASSET AND LIABILITY PORTFOLIO MANAGEMENT With interest rate swaps and options, we help you transform your exposures in a portfolio of liabilities or assets into a more desired form than what their underlying features are. These may be temporary transformations, or you may want to set your portfolio up for the long term and be passive. The tools can be used tactically or strategically, actively or passively, to guard against events that may or may not happen, or worse case scenario you wish to protect yourself against, no matter how unlikely. They can be used to enhance returns, by taking some risk, or to reduce risk and paying some premium. Interest rate risk management tools allow maximum discretion.