Avoid Macquarie Capital Notes 2

Intelligent Investor

Independent Financial Research

When your broker offers you quick profits with Macquarie's latest hybrid securities, respond with a quick 'NO!'. When a banker offers you a hybrid security and a 156-page prospectus, hold on to your wallet. We’ve long preached a ‘no hybrid’ philosophy (see here, here, here, here, here or here). Macquarie Group’s (ASX: MQG) Capital Notes 2 aren’t about to change that. The 5.14% margin the Notes offer above the bank bill rate (currently 2.36%) looks appealing relative to term deposits and is better than the 4.2% margin offered by Westpac’s (ASX: WBC) recent hybrid issue (see Avoid Westpac Capital Notes 3). Nonetheless, it’s still inadequate compensation for the risk, which is nicely summarised in the fine print on Page 4: The Notes are 'subject to payment conditions including MGL’s absolute discretion to determine whether or not to pay distributions'. Make no mistake, Macquarie is trying to reduce its own financing cost and risk, not doing its best to make you rich. Read full article here: (VIEW LINK)


Intelligent Investor
Independent Financial Research

Intelligent Investor is an independent financial research service with a 14-year history of beating the market. Our value investing approach empowers Australians to make more informed decisions to build their long-term wealth. We off structural...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

trending on livewire
Get the best of Livewire by signing up to our popular daily newsletter