Bond Market News

Macquarie Group was upgraded to A from A- by Fitch. Among the drivers for the upgrade is a low double leverage. Fitch explains this further by stating that the same factors that apply to Macquarie Bank also apply to Macquarie Group, given that the latter is the non-operating holding company. The rating agency added that Macquarie Bank has a significant level of non-traditional banking operations relative to domestic bank peers, thus indicating a “robust risk control”. The group’s internationally diversified operations have seen its non-banks’ business model and earnings stability improve, supported largely by the Macquarie Asset Management business. Macquarie Bank has an average liquidity coverage ratio of 221% in 2Q 2022 and sufficient capital buffers with an expected CET1 ratio of 11.5% at end-2022.

Macquarie’s dollar bonds were stable with its 6.125% Perp at 87.26, yielding 9.75%.