 So yeah, so in terms in terms of capital price the pearls seven obviously issued at par as a spread widens that capital price Falls what did what did it get down to and where's it trading at now? Well pearls seven. Yeah was but they're all issued at a hundred dollars. It's now trading about nobody's six I'm okay pearls eight issued a hundred dollars at a higher margin Trading in a hundred and five fifty, so it's a hundred and six. Yeah, so it's I think what it Can you remember what pearls seven got to it's in the low 90s doesn't get below 90 Yeah, and I remember all the the people writing about the the You know the the language they wrote was you know a disaster and it was that this that in the other and I'm trying to understand If it loses 10% in the same environment where equity markets were being ripped up It's people looking at the same asset class and applying the same volatility assumptions to it So it's a disaster because it's 10% in hybrid But if that was applied to the equity go well, that's just a yeah Absolutely, and you know my view on on hybrids. I mean, I think those charts just showed up perfectly it there very Correlated to the equity component. So as a fixed income asset class, I wouldn't really have bank hybrids in there I would say absolutely if you want them in there They do damp down the volatility in terms of the equity So call them out of your equity part of the portfolio and try and get that diversity out of your equity portfolio It's just probably pretty heavily concentrated on financials anyway If you've got kind of a broad asx, you know portfolio and you know put them in hybrids But get that diversity in your fixed income portfolio. That's kind of the same thing Isn't that the real challenge? So if you think maybe if you think about it that okay Hybrids are an asset class in their own right Equalities are an asset class in their own right and you just keep playing around with the the level of diversity required Everything is correlated. So you're about to do a property deal. I'm not saying you have it Let's say you are that's linked to the banks because I learned of the price, you know that it's very hard It is linked and I agree if if investors can get it in their psyche that a hybrid is a kind of a middle asset class But but Australian investors think hybrids are fixed income That's the fixed income market that they see on the ASX That's the one that they that they know and we all know that it's much broader than that We're gonna talk about that. So you get the diversity and the you know The uncorrelated benefits from other parts of that fixed income Yeah, no, I recognize that I just think it's part of the challenges. This is not enough of it. So I agree You know you guys are doing a good job It's still compared to the rest of all it's it's not it's not a massive part of the pie It's very hard to get that by bigger and I think that's the challenge for you know sort of 2017 2018 2019 What do you think the driving teams will be for the in in terms of that origination story in 2017? You mentioned the banks coming back. I recognize that's a thematic that people think about the banks as banks try to become more cautious but at the same time You've got the peer-to-peer lending the financial disruption when I look at what's happening in the US that financial disruption Isn't really happening in the way they anticipated the lenders in the peer-to-peer lending seem to be Institutional, you know, it's Jeffries. It's those sort of organizations and the borrowers seem to be Not of the same credit quality as the banks have let go It's like Ainsley trying to get into Asia. It's much harder than you think and I think they let the credit go that they really don't need It's the wrong credit borrower What do you think drives that direction in 2017 in terms of new issuers? How did we get more issuers into the market? I mean I think it's you know It's we always talk about this and it's it always seems likely that banks are going to pull back in terms of their Lending requirements, but you never really see that because you can have the directive coming down when it's your relationship with a Client a corporate and you've got a loan out to them then that's just revenue coming in I think banks are getting a bit smarter in terms of Adjusting that revenue that they're getting in on a risk-adjusted basis and return on assets or return on on on risk Yeah, and so we're seeing some of those corporates looking to go to an alternative sources of funding Which we can help them with and you know nab's got your business as well Which you know does that similar sure area as well also in terms of? The corporates as well that come to us they're looking for longer maturities So you know banks will typically do three years or maybe five years Whereas we can do you know five out to seven years maybe even ten years in certain circumstances So that's another in kind of thought process for corporates that they can get For the term on their lending and also diversifies their funding source keeps the banks competitive You know so if the bank stops lending which happened during the GFC to a lot of corporates Yep, you know you've got another source of funding which is pretty great because when we did Pete group That was one of the drivers. I did the interview with Pete group in the CA said look I love the bank It's all great, but I want to have more than one lender to my organization When you go and talk to corporates and you ask them to do ASX listed and it's not just because you're part of a broader Team, so it's not just you do over the counter through the Nat team What's the tone from those borrowers at the moment and and point to that fact about What Mark's talking about people like to have different diversity in the people that lend to them because it de-risks their borrowing profile No question about it. And as we said earlier, you know, I look at corporates for subordinated debt I tend to do everything in the subordinated space listed or subordinated be it financials or corporates So we do talk to a lot of corporates. They will tend to come to market if there is Some constraints on bank lending in the subordinated space or they might have their lending linked to How much gearing they've got if they're if they're leveraged a little bit high They might need to do something that's carved out of the leverage so you do it subordinated to the bank lending That's fine the other aspect if they're doing M&A and they they really want the Merger or the acquisition to occur and they don't necessarily want to dilute their equity Which is a key concern for shareholders. Yep. They will look to sub debt now We're gonna take a short break because I want to talk a little bit more about this because this is the story of cube And this is the execution at cube and and it's it's worthwhile explaining to the to the viewers Who cube or who cube are what they did and why they did it because I've been told it's a wrap So we'll go to our first ad break and we'll talk to you soon a bit more on the fixed-income space Specs or shades how about both get two pairs of designer glasses for $199 including a second pair of prescription sunglasses and if you're with a major health fund, there's no gap should have gone to spec savers Interest rates are so low many people are concerned about their retirement Michael at cosec. How can you help investors build their wealth? Well Nick? It's important to follow a strategy at cosec We follow a top-down investment approach to help us identify those businesses that we believe have the brightest prospects Lawrence you're an Oxford scholar and a member of the cosec investment team How do I get my timing right when buying stocks? The goal is to get a quality business and to buy it when it's undervalued and we can use technical Indicators to maximize our profits Minimize any losses timing is so crucial when it comes to the stock market Michael you've recommended some great businesses. How do I move forward? Go to cosec.com.au and register for your free report When cosec talks everyone listens You're a successful professional in life. You always strive for the best so when looking for a serious relationship Why settle for anything less Get to know someone worth getting to know. Register today at elite singles.com.au When it comes to cars everyone thinks they're an expert But the real experts chose the Hyundai Accent as the best city car in Australia Right now you can get the Accent from just $14.99 he drive away We're leaving our generation to join one. It's moving us forward Where knowledge isn't limited by time or space and anyone can change the world from anywhere So we can keep our big city job without the big city We're doing things differently seeing things differently And we're just getting started It's time for a new generation. It's time for gen and bn There is a place that will get your heart racing And you can reserve your cruise for just one dollar But it's like no place News comes at us all day on air online mobile almost everywhere on heads up. We'll sort out what matters Talk to the news makers and share cut-through opinion But best of all we'll give you a heads up on what's hitting the front pages tomorrow. Join me sky news live Welcome back to your money. You'll call Friday night edition. I'm Mark Todd from the nav I'm joined by Nick Chapman who's also from the nav and mark barley from fig And they'll hear to answer any of your questions and I'd love it if you'd call us 1 300 30 34 35 the email is your money at sconews.com.au We will take an email in one second. I just wanted to get to this story And well, let's give it the condensed version. You did cube you Asked for 300 million. You got 900 million in bids. It's a sub debt at 390 over Clients very happy Why did they do it they didn't be really for the reasons we spoke about earlier There was some key m&a. They were looking at the time person purchasing sco but really to Also develop the more bank into modal terminal So that's an import export hub that they're developing out there at more banks going to take A thousand trucks off the road every day. I think everyone will love it by the time it's happening And it's reached financial close just last week and it's um The company is progressing it With a great bunch of management brains out there. So we like what they're doing I've done the deal you you have to you I can't they're not watching I can't forget it I can't forget it. He just had a great experience. He loved it all Um, we've got an email from James and this is where I want to bring marking because he'll be uh, Have a really good insight on this one. Um, this came through the week just wondering if you cover