Singapore Bonds

[dancingshoes]

http://sbr.com.sg/retail/news/capitamall-trust-launches-retail-bond-offering-paying-308-annually

$2000 minimum

 

[dancingshoes]

Considering accrued interests, just compare the current retail bonds:
- CapMall 3.08% & FCL 3.65% fell slightly below par, they are safe bonds but this is the price to pay when the yields are too low.
- CapMall 3.8% and Genting 5.125% are trading appx at par.
- Judging from the above mentioned, there is very limited capital upside for Aspial 5.25% at current 1.02 level.

bro run, can you advise? does buying bond guarantee payout irregardless of recession, i mean like at all times?

 

[lifeafter41]

Considering accrued interests, just compare the current retail bonds:
- CapMall 3.08% & FCL 3.65% fell slightly below par, they are safe bonds but this is the price to pay when the yields are too low.
- CapMall 3.8% and Genting 5.125% are trading appx at par.
- Judging from the above mentioned, there is very limited capital upside for Aspial 5.25% at current 1.02 level.

Ah run, just saw CapMap3.08% trading at 0.985, what would be the yield in this case?.

 

[Runifyouhaveto]

Ah run, just saw CapMap3.08% trading at 0.985, what would be the yield in this case?.

hi L41 bro,
Let's assume u buy at 0.985
Add 0.3% brokerage for your remisier = 0.988
Contains 1-month of accrued interest + 65 months more till maturity
Your yield till maturity is about 3.1%pa (appx)

 

[Runifyouhaveto]

bro run, can you advise? does buying bond guarantee payout irregardless of recession, i mean like at all times?

No, good brother, bonds can also go bust (default, bankrupt).
Depends on issuer's reliability.

 

[Runifyouhaveto]

Having your own business is better than being and employee in this time and age, with the relentless FWs being brought in to compete with Singaporeans for PMET jobs.

Understand from a HR friend there is a lot of EEE and Business grad looking for jobs, not sure if this is prevalent, maybe a check with your cohorts would reveal something.......

Because of the influx of some foreigners with selfish living habits, some condos price got condemned.

 

[MovieStar]

http://www.straitstimes.com/busines...-first-issue-open-for-application#xtor=CS1-10

 

[dancingshoes]

No, good brother, bonds can also go bust (default, bankrupt).
Depends on issuer's reliability.

if company issuing bond goes bankrupt, it means your capital is gone too?

normally, how'd you select the issuer, for instance looking at company report?

thanks bro run.

 

[Hans168]

bro run, can you advise? does buying bond guarantee payout irregardless of recession, i mean like at all times?

yes but the objective is to lock you in for first 3 month of lower interest rate.....sekali USA up interest to 3 % you will bang balls!
Notice that the whole interest spectrum balloons at the end ard year 9th n 10th which means TH n GIC will have another source of cheap cheap fund for their gamble which has typically paid them 7% out of which they now pay us typically 2%...........HUAT AH but for who???

 

[Runifyouhaveto]

if company issuing bond goes bankrupt, it means your capital is gone too?

normally, how'd you select the issuer, for instance looking at company report?

thanks bro run.

technically if the company issuing bond goes bankrupt, you stand to lose part or all of your capital.
very long process to take even part of the money back and most bonds in singapore are unsecured.

Yes, so it is important to be careful

Step 1: Choose Currency and listing location - eg. Most SGD bonds in listed on retail or secondary SGX market are non-taxable. You will enjoy additional gain or loss if you buy USD bonds.

Step 2: Country industry - eg. Oil & Gas are risky at this moment

Step 3: Choose Company - Choose a financially healthier company. Avoid those in heavy debts.

Step 4: Study the type of bond - Is it guaranteed redemption plain-vanilla bond, perpetual bonds or complex toxic bonds eg. Bank Additional-Tier1 bonds

Step 5. Check the yield. If the yield for a safer company is crazily low, you still stand to lose money if you exit before maturity, when interest rates are edging higher or during market recession. Eg. page 1 of this thread - Apple Bonds.


Thread carefully. Bond selection is an art
The risky ones we avoid
The safest ones with mediocre yields, we also must avoid.

Lastly, avoid bond-financing or bond-leveraging unless u are very very very very very very very confident.

 

[bart12]

If bond go bankrupt, bondholders will have first priority over shareholders in the course of liquidation. In most instances, shareholders stake will be wiped out but not for bondholder.

 

[lifeafter41]

hi L41 bro,
Let's assume u buy at 0.985
Add 0.3% brokerage for your remisier = 0.988
Contains 1-month of accrued interest + 65 months more till maturity
Your yield till maturity is about 3.1%pa (appx)

Ah run, thanks!!
As compared to the bank, say DBS 4.75%, now going at 105, wouldn't this be a better deal or OCBC 5.1% at 105.1. Wouldn't it be better?.

 

[Runifyouhaveto]

If bond go bankrupt, bondholders will have first priority over shareholders in the course of liquidation. In most instances, shareholders stake will be wiped out but not for bondholder.

hi bart12, most of the bonds listed in singapore are unsecured.
so after the company goes bust, the secured bondholders, the mortgage properties are probably pledged to the bankers, the clients and suppliers can take over the inventory, etc.

And in the past 20 years, some companies, let their bond default and don't bird the bond investors. Today they are still listed and pending restructuring talks for their old defaulted bonds. Eg.

Foreign investors show confidence in companies backed by billionaire Eka Tjipta Widjaja despite involvement in Asia's worst corporate default
http://www.scmp.com/business/compan...tten-indonesia-billionaire-widjaja-sells-debt

 

[Runifyouhaveto]

Ah run, thanks!!
As compared to the bank, say DBS 4.75%, now going at 105, wouldn't this be a better deal or OCBC 5.1% at 105.1. Wouldn't it be better?.

For details of the 2 bonds, you can compare here:
https://www.bondsupermart.com/main/bond-info/bond-factsheet/SG2C54964409
https://www.bondsupermart.com/main/bond-info/bond-factsheet/KYG668911053

These are old bank perpetual bonds or preference shares which are safer than new bank perpetual bonds which has "loss absorption feature" - your bonds will be converted to shares if the bank cannot need regulatory liquidity requirements.

(PS: don't be confused, DBS has another 4.7% bond with "loss absorption feature" issued in late 2013)
https://www.bondsupermart.com/main/bond-info/bond-factsheet/SG59H0999851

 

[dancingshoes]

technically if the company issuing bond goes bankrupt, you stand to lose part or all of your capital.
very long process to take even part of the money back and most bonds in singapore are unsecured.

Yes, so it is important to be careful

Step 1: Choose Currency and listing location - eg. Most SGD bonds in listed on retail or secondary SGX market are non-taxable. You will enjoy additional gain or loss if you buy USD bonds.

Step 2: Country industry - eg. Oil & Gas are risky at this moment

Step 3: Choose Company - Choose a financially healthier company. Avoid those in heavy debts.

Step 4: Study the type of bond - Is it guaranteed redemption plain-vanilla bond, perpetual bonds or complex toxic bonds eg. Bank Additional-Tier1 bonds

Step 5. Check the yield. If the yield for a safer company is crazily low, you still stand to lose money if you exit before maturity, when interest rates are edging higher or during market recession. Eg. page 1 of this thread - Apple Bonds.


Thread carefully. Bond selection is an art
The risky ones we avoid
The safest ones with mediocre yields, we also must avoid.

Lastly, avoid bond-financing or bond-leveraging unless u are very very very very very very very confident.

thanks bro.

 

[bart12]

That's why I encourage investor to focus on US bond markets for more options.. They have senior note and some are secures as well. Shorter terms and smaller denomination.

hi bart12, most of the bonds listed in singapore are unsecured.
so after the company goes bust, the secured bondholders, the mortgage properties are probably pledged to the bankers, the clients and suppliers can take over the inventory, etc.

And in the past 20 years, some companies, let their bond default and don't bird the bond investors. Today they are still listed and pending restructuring talks for their old defaulted bonds. Eg.

Foreign investors show confidence in companies backed by billionaire Eka Tjipta Widjaja despite involvement in Asia's worst corporate default
http://www.scmp.com/business/compan...tten-indonesia-billionaire-widjaja-sells-debt

 

[Runifyouhaveto]

SPECIAL COVERAGE: Hyflux 6% Perpetual Bonds

ISSUER: Hyflux Ltd (“Issuer”)

STATUS: Direct, unconditional, subordinated and unsecured

TENOR: Perpetual, Callable after 4 Years.

CALL OPTION: To redeem all (and not some only) of the Perpetual Capital Securities (the “Securities”) on 27 May 2020 or any distribution date \
thereafter at par, together with distribution accrued, if any, to (but excluding) the date fixed for redemption


DISTRIBUTION: 6.00% p.a. subject to reset from and including 27 May 2020 & each successive date falling every 4 years thereafter based on prevailing SGD 4Y SOR plus the Initial Spread plus the Step-Up Margin

INITIAL SPREAD: 420 bps

STEP-UP MARGIN: 200 bps

DISTRIBUTION PAYMENT: Semi-annually in arrear, actual/365 (fixed)

DISTRIBUTION DEFERRAL: At issuer’s discretion. Any deferred distributions are cumulative and on a compounding basis

DIVIDEND PUSHER: Yes, with 6 month look back period

DIVIDEND STOPPER: Yes

OTHER REDEMPTION: At par for taxation reasons, accounting reasons, tax deductibility reasons and in the case of minimal outstanding amount
DENOM: S$1,000 each or in integral multiples thereof



Retail Application Closing Date: Noon, 25th May 2016
MINIMUM SUBSCRIPTION: S$2,000 in aggregate principal amount of Securities per application or such higher amounts in integral multiples of S$1,000 thereof

 

[krafty]

SPECIAL COVERAGE: Hyflux 6% Perpetual Bonds

ISSUER: Hyflux Ltd (“Issuer”)

STATUS: Direct, unconditional, subordinated and unsecured

TENOR: Perpetual, Callable after 4 Years.

CALL OPTION: To redeem all (and not some only) of the Perpetual Capital Securities (the “Securities”) on 27 May 2020 or any distribution date \
thereafter at par, together with distribution accrued, if any, to (but excluding) the date fixed for redemption


DISTRIBUTION: 6.00% p.a. subject to reset from and including 27 May 2020 & each successive date falling every 4 years thereafter based on prevailing SGD 4Y SOR plus the Initial Spread plus the Step-Up Margin

INITIAL SPREAD: 420 bps

STEP-UP MARGIN: 200 bps

DISTRIBUTION PAYMENT: Semi-annually in arrear, actual/365 (fixed)

DISTRIBUTION DEFERRAL: At issuer’s discretion. Any deferred distributions are cumulative and on a compounding basis

DIVIDEND PUSHER: Yes, with 6 month look back period

DIVIDEND STOPPER: Yes

OTHER REDEMPTION: At par for taxation reasons, accounting reasons, tax deductibility reasons and in the case of minimal outstanding amount
DENOM: S$1,000 each or in integral multiples thereof



Retail Application Closing Date: Noon, 25th May 2016
MINIMUM SUBSCRIPTION: S$2,000 in aggregate principal amount of Securities per application or such higher amounts in integral multiples of S$1,000 thereof

hi bro run, good to see you again! really glad that you are back. cheers!

 

[Runifyouhaveto]

SPECIAL COVERAGE: Hyflux 6% Perpetual Bonds

FAQs
1. Is the yield good?

There are three ways to look at it.

- Within the company,
Hyflux's old 6% retail preference share is trading at 102plus which means that the net yield is appx 5%
Hyflux's other existing 5.75% secondary perpetual bond gives a net yield of appx 5.4%
Hyflux has another 4.8% perpetual bond which is due soon (net yield about 4.8%)
Other hyflux bonds gives about 3-4% net yield in secondary market

- Comparing against other recent retail bonds
Recent retail bondsfrom similarly highly-geared companies offers lower coupon than Hyflux 6%
eg. Aspial 5.25%, Aspial 5.3%, Oxley 5.15%, Oxley 5%

- Comparing it against other secondary bonds of similar yields (5-7%) and maturity/Call-Date (3-5 years)
(Not comparing net yield for simplicity)
Nam Cheong 5.05%, August 2019
Ezion 5.1%, March 2020
Olam 5.8%, July 2019
Halcyon Agri 6.5%, July 2019
Hyflux's new 6% is in smaller denomination while the above are in $250000 denomination

 

[Runifyouhaveto]

hi bro run, good to see you again! really glad that you are back. cheers!

Thank you good brother. Thanks for remembering me.

ah RUN suffered a major depression after TingRu's heavy defeat.