What we offer

We offer a range of fixed income assets including capital notes, senior unsecured bonds and convertible bonds.


Hybrids are a class of securities that have both debt and equity features. There are three broad types of hybrids – convertibles, preference shares and capital notes.

  • These securities:

    • Usually pay fixed or floating interest payments (or ‘dividend payments’) over a defined period.
    • Often contain rules that allow the issuer of the hybrid the right to buy the security within a defined period, as well as other features that may impact the payment of interest.

    The most important aspect of hybrid securities is the credit/financial strength of the underlying issuer, and the ability of the issuer to meet its ongoing interest payments and capital repayments.

    • Hybrids tend to pay regular income.
    • Some hybrid securities offer franking credits.
    • Receive dividend income - depending on the companies you’ve selected.
    • You can sell a part (or all) of your hybrid holding to meet any urgent cash needs.
    • All securities listed on stock exchanges are required to keep the market informed about their financial health.
    • Guaranteed settlement through the central clearing house - CHESS.

    • In some cases, investors are taking on equity-like risks but only receiving bond-like returns.
    • Coupons are not guaranteed.
    • Some hybrids have investment terms lasting as long as 60 years.
    • Hybrids lie at the riskier end of a company’s capital structure.

    When considering these products please refer to the specific risks outlined in the relevant offering document.

Fixed income

A bond is an over-the-counter (OTC) fixed income security, which is not listed on a formal exchange such as the Australian Stock Exchange (ASX).

    • A bond is a direct debt obligation of the issuer to pay the investor a known regular return throughout the life of the bond, with the principal and final interest being repaid at maturity.
    • The principal gets paid by the issuer at maturity – hence they are considered defensive instruments.
    • Bonds can be issued by Governments, Semi-Governments, Banks and larger Corporates.
    • The coupon is determined when it is first issued to market – factors that are considered include the credit quality of the issuer, term to maturity, supply and demand and the industry of the issuer.
    • Investments have a capital value (loaned value) which is contractually expected to be returned to the investor at the end of the contract term.
    • Bonds are issued with a defined income stream.
    • For fixed rate bonds the income rate, or coupon, is set at the time of issue and will not change for the life of the investment.
    • For floating rate notes, these securities pay a fixed coupon over a floating or variable interest rate benchmark such as the bank bill swap rate (BBSW).
    • Issues ranking higher will exhibit less volatility than those at the bottom of the capital structure.
    • Australian investors are heavily weighted towards cash, property and equities. Two of those three are highly cyclical and typically move in the same direction (property/equity).
    • Investors can hedge a suitable volume of capital from market shocks via un-correlated investments.
    • Most bonds are not listed on an exchange 
    • The price of bonds may be adversely impacted by a fall or rise in interest rates 
    • The issuer may be unable to meet its interest and principal repayments
    • Liquidity will be subject to market conditions 

    When considering these products please refer to the specific risks outlined in the relevant offering document.

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Terms and Conditions

Any advice contained on this webpage has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this webpage, National Australia Bank Limited ABN 12 004 044 937 AFSL 230686 (NAB) recommends that you consider whether it is appropriate for your circumstances. If you are classified as a “Retail Client” under the Corporations Act 2001 (Cth) and the advice contained in this information relates to “Financial Products” which NAB has approved for sale to Retail Clients, NAB recommends you consider the Product Disclosure Statement or other disclosure document, available from NAB for Retail Clients, and seek independent professional advice before making any decisions regarding any product. NAB is the product issuer, unless otherwise specified.