Aussie Hazards From Mortgages to Mines Lift Macquarie Bond Risk
- Cost of insuring bank unit debt near highest since June 2013
- Unease about exposure to home loans, commodity market downturn
Houses stand in Sydney, Australia, on Wednesday, Feb. 17, 2016. Australia's opposition Labor Party is proposing scaling back tax breaks for landlords that have helped fuel a 50 percent increase in property prices in capital cities since 2008.
Photographer: Brendon Thorne/BloombergThose Australians struggling with mortgage payments and the possibility of damage from the global commodity price slump are helping to inflate bond risk for Macquarie Group Ltd.’s banking unit.
The cost of insuring Macquarie Bank notes against non-payment climbed to as much as 172 basis points last month, the highest since June 2013, after the lender flagged a rise in overdue home loans. The Sydney-based bank’s credit-default swaps have increased 39 basis points in 2016, the second most in the benchmark Markit iTraxx Australia index, and were at 155 basis points April 8.